By Liz Moyer

Investing.com — The Dow plunged 1,100 points on Wednesday, but stocks fell again on Thursday. Investors are still concerned by how households are being affected by inflation.

The negative outlook for consumer spending has been exacerbated by weak retail earnings this week. Kohl’s (NYSE 🙂 sank under increasing pressure from activist investors, who are trying to get it to buy. Faced with rising fuel and food prices, consumers are cutting back on discretionary purchases like clothing, and increasing their spending on essential household items.

This will be taken into consideration by the Federal Reserve when they meet next week. However, officials of the central bank, including chair Jerome Powell recently indicated that it would not hurt to increase its benchmark interest rate half-points in order to combat inflation. Market reaction is negative because many fear they will overreact and lead to a decline in economic growth.

A bear market is a decline of 20% relative to the highest point. 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. This bull rally did not last very long, and it was followed by another one that continued to January. The S&P is down 18% this year.

Three things could impact the markets in tomorrow’s future: 

1. Deere earnings

Agricultural equipment maker Deere & Company (NYSE:) 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 listen for clues about how delays in planting seasons in the U.S.A and high commodity prices may be affecting sales.

2. Foot locker Earnings

Foot Locker Inc (NYSE) expects to post earnings per share at $1.50 for a $2.2 million revenue. Watch out for signs that consumers are changing their spending habits, analysts will closely monitor the situation.

3. Davos returns

Due to Covid, the World Economic Forum’s meeting was delayed once more on Sunday. The event will continue through most next week. The meeting follows the G-7 European meetings and President Joe Biden’s trip to Japan, South Korea and South Korea.