Nasdaq Retreats 2%, Indexes Drop After Walmart Profit Warning

US stocks were sharply lower on Tuesday afternoon, with Nasdaq down more than 2%, as a profit warning by Walmart dragged down retail shares and fueled fears about consumer spending.

Walmart shares had fallen 8% after the retailer cut its full-year profit forecast late on Monday. Walmart blamed surging prices for food and fuel, and said it needed to cut prices to pare inventories. Shares of Target Corp (TGT.N) declined 3.8% and Amazon.com Inc (AMZN.O) dropped 5.1%.

Amazon said it would raise fees for delivery and streaming service Prime in Europe by up to 43% a year. Amazon was among the biggest drags on the Nasdaq and S&P 500, while consumer discretionary fell more than 3% and led declines among S&P 500 sectors.

The majority of companies that reported today beat earnings, and that has been the case. But, of course there have been some warnings, and that’s what the market is focusing on. Walmart basically pulled the plug, and most retailers are lower across the board.

Coca-Cola Co gained 1.9% after the company raised its full-year revenue forecast. McDonald’s Corp rose 3% after beating quarterly expectations. A busy week for earnings includes reports from Alphabet Inc and Microsoft Corp after the bell. Microsoft was down 3.4% and Alphabet was down 2.9%.

The Dow Jones Industrial Average fell 239.66 points, or 0.75%, to 31,750.38, the S&P 500 lost 52.28 points, or 1.32%, to 3,914.56 and the Nasdaq Composite dropped 239.38 points, or 2.03%, to 11,543.29.