Consumer companies slid amid fears of stagflation and a weak tally of retail sales.
U.S. retail sales fell 0.2% in January from December levels. The decline in store sales weighed on shares of chains such as Macy's and Kohl's, which fell by 3.5% or more.
Shares of Gap fell 14% after the clothing retailer's fourth-quarter earnings lagged analysts' estimates, hurt by weaker sales for its struggling Athleta women's activewear brand. Losses in luxury firms were less pronounced.
Federal Reserve policymakers had hinted earlier this year that rate cuts would resume if the jobs market weakened. Now, however, Fed Chair Jerome Powell's hands could be tied following the U.S.-Israel military campaign in Iran, which has closed key global shipping lanes and threatens to shut down swaths of energy production.
A rout in airline stocks continued, with the U.S. Global JETS exchange-traded fund sinking into correction territory, down more than 10% since the start of the year.
United Airlines Chief Executive Scott Kirby said the rise in fuel prices will have a "meaningful" impact on the carrier's first- quarter earnings and could start impacting airfares quickly, CNBC reported.
Similarly, German carrier Deutsche Lufthansa warned the conflict in the Middle East could impact its performance this year.
Inflation fears have driven up Treasury yields, which will likely translate into another increase in mortgage rates.
Write to Rob Curran at rob.curran@dowjones.com
(END) Dow Jones Newswires
03-06-26 1713ET
