HomeFinancial MarketsU.S. Stocks Decline Following Caution of "Earnings Recession"

U.S. Stocks Decline Following Caution of “Earnings Recession”

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.

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