The Dow plunged by more than 1,100 points, suffering it worst day since 2020, as big retailers reported their profits are getting crushed by inflationary pressures.

The S&P 500 fell by 4% on Wednesday and the Nasdaq shed nearly 5% as investors reacted to a weak first quarter earnings report by Target.

The Dow Jones Industrial Average tumbled to 31,490.07 — off 1,164.52 points, or 3.6%, its worst percentage decline since June 11, 2020 and its lowest closing level since March 2021.

Target’s first-quarter profit halved and the company warned of a bigger margin hit on rising fuel and freight costs. Shares fell 25%, their worst day since the Black Monday crash on Oct. 19, 1987. 

The retailer’s results come a day after rival Walmart trimmed its profit forecast after blaming persistent supply-chain kinks and higher payroll costs for disappointing margins.

Retailers had some of the biggest losses. Dollar Tree fell 14% and Dollar General slumped 11%. Best Buy fell 11% and Amazon declined 7.2%. Technology stocks also fell broadly. Apple lost 5.6%.

Blue-chip tech firms like Microsoft, Google parent Alphabet, Facebook parent Meta Platforms and Tesla fell between 3.9% and 7% after leading a sharp rebound in the previous session.

Rising inflation, the conflict in Ukraine, prolonged supply chain snarls, pandemic-related lockdowns in China and prospects of aggressive policy tightening by central banks have weighed on the markets recently, stoking concerns about a global economic slowdown.

Wells Fargo Investment Institute on Wednesday adjusted its economic expectations to make a mild US recession its base case for the end of 2022 and early 2023 based on economic data. 

Federal Reserve Chair Jerome Powell vowed on Tuesday that the U.S central bank will raise rates as high as needed to kill a surge in inflation.

Traders are pricing in 50 basis point interest rate hikes by the Fed in June and July.

Investors are concerned that the central bank could cause a recession if it raises rates too high or too quickly.

Worries persist about global growth as Russia’s invasion of Ukraine puts even more pressure on prices for oil and food while lockdowns in China to stem COVID-19 cases worsens supply chain problems.

The United Nations is significantly lowering its forecast for global economic growth this year from 4% to 3.1%. The downgrade is broad-based, which includes the world’s largest economies such as the US, China and the European Union.

“A portion of the market is definitely focusing on a potential growth slowdown,” said Zachary Hill, head of portfolio management at Horizon Investments.

With Post wires