By Liz Moyer
Investing.com -- Stocks fell on Thursday for a second day, though not as far as the 1,100-point plunge in the Dow on Wednesday. Investors continue to be worried about how inflation is hitting households.
Retail earnings have been mostly weak this week, adding to the negative outlook on consumer spending. Kohl's (NYSE:KSS) soured the mood again on Thursday, under pressure as it faces prods from activist investors who want it to find a buyer. Consumers, facing rising prices for food and fuel, are easing back on spending for discretionary items such as clothing and spending more for basic household staples.
The Federal Reserve will have to take this all into account when it meets next week, though officials from the central bank, including Chair Jerome Powell, have indicated in recent days that more half-point increases to its benchmark interest rate would be appropriate to fight inflation. The market is reacting negatively because some fear the Fed will be too aggressive and tip the economy into a recession.
The S&P 500 is inching near a bear market, defined as a fall of 20% from the most recent high. But perhaps the good news is that the last time the S&P crossed that threshold was in March 2020, at the outbreak of the pandemic in the U.S. It didn't last long and went on to produce another bull rally that lasted to January. The S&P is down 18% this year.
Here are three things that could affect markets tomorrow:
1. Deere earnings
Agricultural equipment maker Deere&Company (NYSE:DE) is expected to report earnings per share of $6.69 on revenue of $13.2 billion, according to analysts tracked by Investing.com. Analysts will be listening for clues on how a delayed U.S. planting season in the U.S. and high commodity prices are affecting sales.
2. Foot Locker earnings
The athletic apparel retailer Foot Locker Inc (NYSE:FL) is expected to report earnings per share of $1.50 on revenue of $2.2 billion. Analysts will be watching closely for more signs of changing consumer spending behavior.
3. Davos returns
The meeting of the World Economic Forum, delayed again because of Covid earlier this year, kicks off in person on Sunday and runs through most of next week. It comes on the heels of the G-7 meetings in Europe and as President Joe Biden travels to Japan and South Korea.