Why Is the Stock Market Down Today? Dow Slides and Target Tumbles.

Traders on the floor of the New York Stock Exchange last week. The Dow Jones Industrial Average had its worst day since 2020 on Wednesday.

Photo by Spencer Platt/Getty Images

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Sometimes it takes just one stock to bring the market’s worst fears to life. On Wednesday, that stock was Target.

It was a day straight out of investors’ nightmares. The

Dow Jones Industrial Average
fell 1,164.52 points, or 3.6%, while the

S&P 500
declined 4%, and the

Nasdaq Composite
dropped 4.7%. The S&P 500 and the Dow had their worst days since June 11, 2020, while just seven S&P 500 stocks finished higher on the day.

And it was mostly, if not all, due to earnings from Target (ticker: TGT). The big-box retailer not only missed earnings expectations but also said that margins would continue getting squeezed due to inflation. It was the latter, more than the former that caused investors to panic, sending the stock down 25% on Wednesday. From there, it was easy to extrapolate Target’s problems to the broader market.

“Today’s broad-based market selloff concerns the ability of companies to pass along higher costs, something that was questioned but which found somewhat of an answer with the retailer’s earnings reports,” writes Quincy Krosby, chief equity strategist at LPL Financial. “[But] many of the top retailers are unable to pass along the higher labor costs and higher prices wrought by a still constrained supply chain.”

The problem extends to consumers, and not just to retailers like Target. While sales were…


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