Dow Jones Futures Fall After Target Triggers Sell-Off; Market Rally Has 90%

Dow Jones futures fell modestly overnight, along with S&P 500 futures and Nasdaq futures, amid weak revenue and guidance from Cisco Systems. The stock market rally sold off hard Wednesday, as a big Target (TGT) earnings miss raised major concerns about retailers, related sectors and the broader economy amid hot inflation and weakening demand.

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Wednesday’s sharp selling comes right on the heels of the major indexes staging a follow-through day to confirm the new stock market rally, flashing bearish signals.

After the close, Cisco Systems (CSCO) and Sociedad Química y Minera de Chile (SQM), or SQM, reported earnings. Cisco earnings edged past fiscal Q3 views, but revenue missed and the networking giant also guided lower for the current Q4. CSCO stock plunged 13% overnight. Arista Networks (ANET) and other related stocks also fell solidly.

SQM earnings are still pending after hours for the fertilizer and lithium play. SQM stock edged up 0.4%% to 90.21 in Wednesday’s regular session after hitting 93.14 intraday, briefly topping a 90.97 buy point.

The video embedded in this article discussed Wednesday’s market sell-off and analyzed TGT stock, Northrop Grumman (NOC) and Broadcom (AVGO).

Target Earnings Bad News For Retail

Target earnings tumbled 41%, far more than expected. The retailer blamed shipping costs as well as consumers shifting from TVs and other discretionary items. Target sees margin pressures throughout the current fiscal year. That came a day after Walmart (WMT) missed on EPS and guided low, citing higher costs for goods, shipping and labor. At the time, investors might have thought or hoped that Walmart’s woes were company-specific, but Target’s results signaled a much-broader problem.

Target stock crashed 25% to 161.61. Walmart sank 6.8% after tumbling 11.4% on Tuesday. Both are at the lowest since 2020.

If Walmart and Target are struggling in the current economic climate, that can’t be good for other discounters and retailers and general.

Dollar Tree (DLTR) plunged 14.4% after slipping 3.2% on Tuesday. DLTR stock had been holding up well, but dropped below its 50-day on Tuesday and crashed to its 200-day line. Costco Wholesale (COST) lost more than 12%, after already round-tripping a breakout and dropping below key moving averages in recent weeks. Both Dollar Tree and COST stock report next week.

Best Buy (BBY), which reports early Thursday, sank 10.5% to a two-year low.

Trucking Firms, Tesla, Apple Stock Hit

J.B. Hunt Transport Services (JBHT) sold off 9%, tumbling from near its 10-week line. As consumer demand weakens, trucking companies may see weaker demand, and struggle to pass on skyrocketing diesel fuel prices.

Apple stock tumbled 5.6% to 140.82, a six-month closing low, as the Target warning on consumer discretionary spending added to fears for the Dow Jones tech titan. In the past several weeks, iPhone contract manufacturer Foxconn and Taiwan Semiconductor (TSM), which makes chips for Apple (AAPL) and many others, warned of weak smartphone demand. AAPL stock is on track for an eighth straight weekly loss.

Tesla stock tumbled 6.8% to 709.81, the lowest close since August. While weaker consumer discretionary in theory could hurt demand for Tesla’s high-priced electric vehicles, overall auto production is so low that supply is still the overriding factor. Tesla (TSLA) is being pressured along with other highly valued growth names, along with Shanghai plant output issues and CEO Elon Musk’s ongoing Twitter (TWTR) takeover saga. Twitter stock fell 3.8% to 36.85, a two-month low and even further below Musk’s $54.20 takeover price.

Also, the S&P 500 ESG index booted Tesla, largely on corporate culture issues, triggering more angry tweets from Musk.

Meanwhile, the U.S. National Highway Traffic Safety Administration is probing a Tesla Model S crash earlier this month that killed, possibly involving Autopilot. The NHTSA is probing dozens of Autopilot-related accidents.

Tesla Vs. BYD: Which Booming EV Giant Is The Better Buy?

Dow Jones Futures Today

Dow Jones futures fell 0.25% vs. fair value. S&P 500 futures declined 0.3%. Nasdaq 100 futures slumped 0.55%. Cisco stock is a Dow Jones, S&P 500 and Nasdaq component. Several other networking and hardware stocks also lost ground.

The 10-year Treasury yield fell 2 basis points to 2.87%.

U.S. crude oil prices declined 1%.

Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.

Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live

Stock Market Rally

The stock market rally opened sharply lower and kept falling on Wednesday.

The Dow Jones Industrial Average tumbled 3.6% in Wednesday’s stock market trading. The S&P 500 index skidded 4%. The Nasdaq composite plunged 4.7%. The small-cap Russell 2000 gave up 3.5%.

U.S. crude oil prices reversed from modest gains to decline 2.5% to $109.59 a barrel….