Wells Fargo blames retail slump for Thursday’s sell-off, sees more volatility ahead
There’s one main culprit for Thursday’s sell-off, according to Wells Fargo: Retail. Strategist Christopher Harvey said Dollar Tree ‘s post- earnings slide of nearly 13% was a catalyst for the broader leg down and bolstered fears of a slowdown among consumers. All three of the major indexes ended Thursday more than 1% lower. The S & P 500 and Nasdaq Composite had their worst performances since Aug. 2, and the Dow Jones Industrial Average had its biggest one-day decline since March. “Going into 2023 our main consumer theme was ‘Services’ over ‘Stuff,'” he said. “This is playing out, yet it also seems to be vexing some.” The trend of consumers valuing experiences over more goods coming out of the pandemic can also be seen across Nike , Macy’s , Burlington and Foot Locker , he noted. He added the midday fade in Nvidia did not help Thursday’s performance either. Nvidia finished modestly higher after initially surging on the back of its expectation-shattering earnings report earlier in the session. Harvey noted a “sell the news” mentality. Stocks paint a more mixed picture on a week-to-date basis. The Nasdaq Composite and S & P 500 have added 1.3% and 0.2%, respectively, while the Dow has slid 1.2%. Harvey warned there could be more swings ahead. And he said to expect Federal Reserve Chair Jerome Powell to emphasize a higher-for-longer interest rate environment at his speech in Jackson Hole, Wyoming, on Friday. “Overall rates and equities are beginning to firm, but it’ll be volatile,” he said. — CNBC’s Michael Bloom contributed to this report
