Inflation fears wipe billions off blue chips

WALL Street took another hammering last night, as poor company results fuelled by soaring inflation wiped billions off blue chip companies’ value.

The Dow Jones fell another 0.75pc, the S&P 500 dropped 0.58pc and the tech-heavy Nasdaq drifted 0.26pc lower.

The Nasdaq is already in a bear market, down 28pc year-to-date, the S&P 500 has lost 19pc and the Dow Jones is off 15pc.

A bear market is when it has dropped 20pc or more over at least a two-month period.

Amazon shares have tanked over a third since the start of the year and Microsoft’s stock price is down around a quarter.

US stock markets are diving further on the back of surprise weak numbers from American bellwether stocks.

Target and Walmart reported dire numbers this week – Target’s share price fell 25pc after its earnings per share almost halved while Walmart reported a 25pc drop in quarterly earnings.

Department store Kohl’s is the latest US household name to slash its full-year profit forecast, sending shares down 14pc this week.

Neil Wilson, chief market analyst at Markets.com, said: ‘However bad it looks, it can easily get worse. Walmart and Target only underscored the state of the inflation crisis facing the consumer.’

Inflation in the US is at a 40-year high at 8.3pc. Goldman Sachs analysts estimate a 35pc chance the US economy will enter a recession within two years.

Wall Street’s sell-off is hurting London’s stock market as inflation and lower customer spending show no sign of easing. The FTSE 100 fell 2.82pc in early trading to 7239 points, though it recovered slightly to close at 7303 points.

Record-busting inflation is pushing countries to desperate measures with Sri Lanka defaulting on its debt for the first time since it gained independence in 1948.