The Dow Jones Industrial Average, an index of blue chip companies, on Wednesday approached its worst day since 2020, when investors panicked again due to rapid inflation and a possible recession.

The Dow was down nearly 4% after a number of retailers posted disappointing results, the biggest decline since October 2020.

Shares of Target, one of the largest retailers in the U.S., fell 26% after the company pointed to rising cost pressures, sparking investors’ fears around inflation.

Target’s quarterly results also far exceeded analysts ’expectations, with stock prices falling to their worst day since 1987.

Other retailers echoed Target’s sentiment, saying their profits had suffered from slow sales, supply chain problems and rising costs.

Shares of Dollar Tree, Dollar General and Costco Wholesale also headed for the sharpest decline in recent years.

The sell-off marked a sharp reversal since Tuesday, when markets rebounded after strong key technology stocks.

“Inflation is hitting every aspect of the earnings report, whether it’s the transportation side or supply chain disruptions,” Nick Hyakumakis, president and founder of NEIRG Wealth Management, told the Wall Street Journal.

“Customers no longer buy the more expensive goods they normally buy. All of this is traced to the income statement.”

Since the beginning of this year, the S&P 500 has fallen by 16.25% and the Dow by 11.25%.

Meanwhile, Russell 2000 – the main index for small US companies – has fallen 21.5% since the beginning of the year, and the Nasdaq fell 25.75%.

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