Updated at 4:08 pm EST
Stocks finished lower Thursday as global markets continue to wilt under the pressure of surging inflation, slowing growth and aggressive central bank rate hikes.
The Dow Jones Industrial Average finished down 236 points, or 0.75%, to 31,253, while the S&P 500, which is down 18.2% for the year, lost 0.58% and the tech-heavy Nasdaq slipped 0.26%.
Stocks have been jolted by warnings from blue-chip retailers Target (TGT) - Get Target Corporation Report and Walmart (WMT) - Get Walmart Inc. Report that rising fuel and labor costs, as well as mis-timed inventory builds, will pressure near-term profit margins.
The country's two largest retailers each suffered their biggest single-day declines since 1987 this week, with Target losing around a quarter of its value in yesterday's carnage.
The moves, as well as bets on faster rate hikes from the Fed, have the S&P 500 on pace for the biggest weekly slump in more than a decade and, 95 trading days in, its second-worst start to any trading year since 1932.
The Fed, for its part, has said it won't veer from its rate hike path until there is "clear and convincing" evidence that inflation is slowing, according to comments earlier this week from Chairman Jerome Powell.
Rate traders are still pricing in a 85% chance of a 50 basis point hike next month, according to the CME Group's FedWatch tool, as well as an 84.7% chance of a similar move in July, even as benchmark 10-year Treasury bond yields slump to 2.853% -- down from around 3.19% early last week -- and the dollar index fell 0.83% against a basket of six global currencies to 102.947 in early European trading.
The market's key volatility gauge, the VIX, was also on the rise in early trading, but fell below the 30 point mark by the end of the session
"The stock market will remain in purgatory until the Federal Reserve smothers the inflationary wildfire with higher interest rates that cool consumer demand for goods, services, houses and hotel rooms," said Ryan Belanger, managing principal and founder of Boston-based Claro Advisors.
"Investors should become accustomed to significant downside and upside moves in stocks, which is common during times of tremendous uncertainty," he added. "We expect the stock market to trade near or in bear market territory for the coming months, creating a frustrating range-bound market that will test the will of many investors."
Cisco Systems (CSCO) - Get Cisco Systems Inc. Report slump 13.7% after the world's biggest computer network equipment maker posted weaker-than-expected third quarter sales, and forecast softer near-term profits, thanks in part to supply chain disruptions that are holding back deliveries of key components.
BJ's Wholesale Club (BJ) - Get BJ's Wholesale Club Holdings Inc. Report rose 7.4% after it posted stronger-than-expected first quarter earnings while keeping a lid on cost increases that plagued profit updates from retailing giants Target and Walmart.