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Stocks open lower after retail earnings, Fed Chair Powell comments

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Yahoo Finance's Jared Blikre breaks down how markets opened on Wednesday.

Video Transcript

JULIE HYMAN: Welcome back to Yahoo Finance Live as we watch stocks tumble once again today. The NASDAQ leading the way downward, almost 2% lower. Let's get to Jared Blikre on the floor of the New York Stock Exchange. What's going on, Jared?

JARED BLIKRE: That's right. Risk-on, risk-off. It seems it happens-- it switches every other day. Today, it's a little bit of risk-off. But the day is very young. Nevertheless, look at another 1%-plus day in the S&P 500. It seems that's the new norm. And let's take a look at a year-to-date chart. Now, we are trying to forge the semblance of a little bottom here. A lot of analysts coming out with calls for a short-term bounce, at least. Not necessarily calling for record highs or anything long-term.

But given the oversold nature of the markets, it would be logical to have a bounce from here. What tends to go up, well, that which has been beaten down, which, well, that's just about everything. Now, we've got to take a look at what's going on inside the market here, and I'm going to focus on retail in a second. But just want to go over some of the sector action. And let's bring that up. Because we are seeing everything under pressure now.

Consumer discretionary, that is the retail sector. That is the worst off. That is down over 3 and 1/2%. Consumer staples right behind it. So you think about it-- yesterday, we had the Walmart earnings, which were the worst since-- well, the worst stock drop since 1987, that Black Monday crash. Today, its Target in a very similar boat. The second worst day ever. And what's going on here? We're seeing some of the generals crash. And what do I mean by that?

I mean some of the biggest stocks are having a poor performance. And I think it's very instructive. You guys had a great conversation about Walmart yesterday, the pressure they're under from margins. And Target, today, as well. Brad, you brought up that inventories issue with respect to Target. If they start discounting, what does that do to price inflation if it happens on a mass level? I think that would give the Fed the potential to cover itself in the coming quarters.

I think they blinked by September. I think they're going too far, too fast at this point. I think they're going to break the market. But it remains to be seen if that actually happens. Now, here, we have our retail heat map up. I just want to plot what's going on in Target. When we see the generals crash like this, it is a very big moment. And you can see, on a year-to-date basis, down 30%. We've got to go back three years to see where we are in the price action.

So this particular level right here, I'm not seeing that as a big one. We could go all the way back down to 120, 130 and mean absolutely nothing. The capitulation side I'm waiting for, guys? Apple. When Apple crashes, that's when I get really bullish.

BRIAN SOZZI: General Blikre, I really enjoyed your Morning Brief newsletter, which is on our home page right now. It's on crypto. Everyone should read it. We'll check back with you later.

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