- NYSE: GME rebounds over 4% on Wednesday after the Fed disappoints.
- WalMart’s profit warnings sent a shockwave through the retail industry.
- GameStop’s running mate AMC is also feeling the pinch of WalMart’s warning.
Update: NYSE: GME snapped its four-day corrective decline from multi-month highs and rebounded 4.16% on Wednesday, as bulls were rescued by the less hawkish Fed verdict. Fed Chair Powell and Company hiked the key rates by 75 bps, as widely expected, but abandoned the forward guidance. The Fed announced a meeting-by-meeting approaching, depending on the incoming data, which was read as a bit dovish by market participants. Major Wall Street indices woke up from slumber, helping the turnaround in the meme stock. Shares of GME were on a downward spiral ever since its stock split, as risks of an imminent recession weighed negatively on the retail stock.
NYSE:GME dropped for the third consecutive day following its stock-split, as markets fell ahead of the Fed rate hike on Wednesday. On Tuesday, shares of GME sank by a further 4.56% and closed the trading session at $32.43. Stocks pulled back on a busy day for financial headlines. The Fed rate hike is expected to be announced on Wednesday, with big tech earnings and a stark warning from WalMart (NYSE:WMT) also rattling investors. The Dow Jones fell by 228 basis points, the S&P 500 dropped by 1.15%, and the NASDAQ plummeted by a further 1.87% during the session.
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Retail stocks like GameStop were rocked on Tuesday, as WalMart issued lower guidance for the quarter and the full year. The reason? Inflation in the prices of essentials like food, housing, and fuel, have caused consumers to cut back on retail spending. WalMart has been slashing prices as of late to try and reduce excess inventory that is piling up at its warehouses. Other retail stocks sold off on the news including Target (NYSE:TGT), Amazon (NASDAQ:AMZN), and Home Depot (NYSE:HD). Shares of WalMart fell by 7.64% during the session.
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GameStop’s running mate AMC (NYSE:AMC) also had a difficult time following the announcement from WalMart. Why is this? Going to the movies has long been seen as an extravagance. If consumers do not have enough money to pay for staples like groceries, they likely won’t have much extra spending money for going to the movies. Shares of AMC were down yet again on Tuesday, as the stock fell by 5.93%.
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