US stocks suffered their biggest fall since the early months of the coronavirus pandemic yesterday as weak consumer indicator results stoked concerns about the impact of inflation and stifled supply chains on business profits.

The benchmark S&P 500 stock index fell 4%, its biggest loss since June 2020, with 98% of stocks in the index down yesterday.

Target, the U.S. retailer, led the declines, plunging 25% after saying rising transportation, wage and fuel costs and disrupted logistics would hurt its profit margins. The warning came a day after Walmart, the world’s biggest brick-and-mortar retailer, cut its profit forecast and said it had also been caught off guard by broad inflationary trends.

The lackluster quarterly reports sparked selling on U.S. stock markets as investors, fearing an economic slowdown, trimmed positions in their portfolios. Tech giants including Apple, Nvidia and Amazon all fell more than 5%, with the tech-dominated Nasdaq Composite down 4.7%.

“There is a beginning of deterioration of the [economic] growth story,” said Michael Metcalfe, head of macro strategy at State Street Global Markets. “And it started to get picked up in [corporate] earnings.”

Thanks for reading FirstFT Asia. Any comments on today’s newsletter? Email me at [email protected]. —Sarah

Five other stories in the news

1. Erdoğan blocks NATO membership talks with Sweden and Finland Turkey’s president delayed NATO plans to bring the two Nordic countries into the military alliance, but insisted he was not ruling out membership bids. Ankara wants to “reach an agreement” which includes the extradition of 30 people accused of terrorism in the country.

2. International investors are selling Chinese debt at a record pace Foreign fund managers sold $35 billion worth of renminbi-denominated bonds in 2022, nearly half of that in April. Covid-19 lockdowns have hit the country’s currency – which has fallen 5% against the dollar this year – while rising US yields have reduced appetite for Chinese debt.

• Learn more about the Chinese economy: Local governments have been forced to divert poverty-fighting funds to fund mass coronavirus testing as Xi Jinping’s zero-Covid policy leads to growing financial strains.

3. Nike’s diversity manager leaves the company after 2 years Felicia Mayo, who served as director of talent, diversity and culture at the world’s largest sportswear manufacturer since July 2020, will leave the company at the end of July. She is the second executive to leave this position in as many years. For more sports business news Sign up for our dashboard email.

4. Saudi PIF acquires 5% stake in Nintendo Saudi Arabia’s sovereign wealth fund bought 6.5 million shares of Kyoto-based Kyoto creator mario and donkey kong as it continues to grow in the gaming and esports industry.

5. Casino mogul accused by US of lobbying on behalf of China Steve Wynn, who helped turn Las Vegas and Macau into booming gambling hubs, has been accused by the US Justice Department of lobbying the Trump administration on behalf of the Chinese government to deport a prominent critic from the United States to China. Lawyers acting for Wynn have denied the allegations.

The day ahead

Philippines Monetary Policy Committee Meeting Analysts from DBS Bank, HSBC and Standard Chartered expect policymakers to announce a 25 basis point hike in the country’s interest rate. (The Manila Times)

NATO Defense chiefs will meet in Brussels on Thursday, as US President Joe Biden welcomes Finnish and Swedish leaders to the White House to discuss their NATO bids.

European Central Bank Minutes Policymakers will release the minutes of their latest meeting, at a time when central banks around the world seek a sweet spot for interest rates in the fight against inflation. Finding the right balance between growth and inflation is fraught with pitfalls.

What else we read

Indian export shock exacerbates global food crisis In a sharp U-turn, India announced a wheat export ban after sudden heat waves dented forecast domestic production and pushed prices up. India’s about-face highlights the need for some more efficient large-scale food producers who reliably prioritize exports, writes Alan Beattie.

How Covid affects the human brain Cognitive impairment caused by severe Covid-19 is comparable to losing 10 IQ points, researchers have suggested. The FT’s global health editor, Sarah Neville, summarizes the latest research into the neurological effects of the disease.

Moderna president defends his hiring process after CFO fiasco Last week, the chief financial officer resigned a day after joining the vaccine maker, following an investigation at his former employer. But Noubar Afeyan says it would be wrong to confuse the sudden departure with a wider cultural issue at Moderna.

Top economies battle to lead the race for supercomputers The United States has made a new breakthrough in processing power that will have a big effect on climate change research and nuclear weapons testing. But success is likely to be mixed, as China took this step first and has led the world in supercomputing for years.

How do today’s musicians make money? Amazon Music, Apple Music, Spotify and YouTube Music together have over 560 million estimated subscribers and many other non-paying users. Unable to compete with the streaming giants, some artists are scrambling to develop their own business model.

Travel

Have you ever wondered what it’s like to see the world through the eyes of a pilot? For Mark Vanhoenacker, big cities have a special meaning – and their post-pandemic revival is a joy to behold.