Stocks fall as more retailers report profit hits from inflation.

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Stocks dropped on Wednesday, extending the volatile stretch on Wall Street, as a second large retailer — Target — reported that inflation was taking a toll on its profitability. It came after Walmart reported a similar drop on Tuesday.

The S&P 500 fell 1.8 percent in early trading, after marking a 2 percent gain the day before. The tech-heavy Nasdaq composite was down 1.5 percent.

The recent swings in stock prices come with the S&P 500 hovering just above bear market territory, or a 20 percent drop from its most recent high. Through Tuesday, the index is about 14 percent below its Jan. 3 high.

  • Target fell 25 percent after the company reported that high costs affected its profits in its latest quarter. Walmart, which said on Tuesday that its profit fell 25 percent from a year ago in the first three months of the year, was down 4 percent after losing 11.4 percent the day before.

  • Other retailers were also lower. Macy’s fell 8.2 percent; Best Buy dropped 6.4 percent; and Lowe’s dropped 2 percent.

  • “Consumers are weathering the inflation hit,” Fiona Cincotta, senior financial markets analyst at Forex.com, wrote in a note. “Retailers, however, are not doing so well at navigating through 40-year high inflation.”

  • European stock indexes were also lower on Wednesday, with the Stoxx Europe 600 down 0.8 percent.

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