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Consumer discretionary (XLY) -3.27% is one of the sectors feeling the most significant pain on Tuesday as major indices tumble on the latest CPI report. Within this category, many eCommerce names are seeing some of the steepest declines.
For the month of August, the CPI rose 0.1%, catching a market that had anticipated a decline of the same magnitude off guard. The surprising rise has increased the probability of a sustained hawkish stance from the Fed and raised concerns on consumer strength and confidence.
Amid the latter concern, internet retail names like Wayfair (W) -9.01% and Chewy (CHWY) -6.98% were among the starkest decliners. Despite a relatively modest increase in apparel prices, rising “only” 5.1% from a year ago amid promotional activity, names like Etsy (NASDAQ:ETSY) -5.58%, Stitch Fix (SFIX) -6.9%, The RealReal (REAL) -8.56% each declined sharply shortly after the day’s market open. Even Amazon (NASDAQ:AMZN) slipped 4.68% in morning trading in New York. Meanwhile, the data appeared to exacerbate an after-earnings decline for Rent the Runway (RENT), which marked an over 30% decline in early trading.
Amid a slight decline in used auto prices and a rise in new auto prices sequentially, both Carvana (CVNA) -9.22% and Vroom (VRM) -5.38% each declined notably as well. The move downward reversed a generally positive trend for both names in the past week.
Elsewhere, home furnishing and security stocks like Mohawk Industries (MHK) and Fortune Brands Home & Security (FBHS), casino stocks PENN Entertainment (PENN) and Caesars Entertainment (CZR), and homebuilders Lennar (LEN) and D.R. Horton (DHI) were among the largest decliners in the S&P.
Read more on trends for consumer staples stocks on Tuesday.