U.S. stocks declined marginally on Wednesday following corporate financial updates warning of an “earnings recession”. This assessment comes after analysts reflected on the government’s retail sales report, indicating a slowdown in consumer spending over December 2022.
In response, St. Louis Fed President James Bullard recommended that he and his colleagues raise interest rates above 5% in an effort to suppress inflation as much as possible following the reading.
The Commerce Department stated in its report that retail sales on a whole fell by 1.1% last month, thereby exceeding analysts’ forecasts of a 0.8% decline. The Producer Price Index declined by 0.5% last month; the largest monthly drop since the pandemic.
The Nasdaq Composite experienced a 0.2% drop, while the S&P 500 and the Dow Jones Industrial Average fell by 0.4% and 0.7% respectively.
As economic conditions tighten, Microsoft announced its decision to cut 10,000 jobs in an effort to cut costs. Shares in United Airlines fell after the U.S. major carrier reported better-than-expected earnings during the final quarter of 2022.