Stocks plunged on Wednesday after disappointing earnings reports from retail giants raised fears of a looming recession and as the Federal Reserve has sought to control inflation. The decline comes after markets fell sharply on May 5, in what was the worst trading session of 2022.

The S&P 500 had its worst day since June 2020, closing at 3,923.68, a drop of 165.17, or 4.04%, while the Dow 30 closed at 31,490.07, down 1,164.52, or 3.57%. The tech-heavy Nasdaq Composite dropped 566.37, or 4.73%, to close at 11,418.15.

One of the big losers on Wednesday was Target (TGT), which cut its full-year operating income margin outlook due, in part, to rising fuel prices. The news comes after Walmart (WMT) on Tuesday reported weaker-than-expected quarterly earnings on rising costs.

Shares of Target and Walmart fell 24.93% and 8.92%, respectively. Shares of Costco (COST) and Dollar General (DG) also plunged in Wednesday's trading.

“Consumers are weathering the inflation hit,” Fiona Cincotta, a senior financial markets analyst at Forex.com, said in a note. “Retailers, however, are not doing so well at navigating through 40-year high inflation.”

Shares of Cisco closed down 17% as the tech giant forecasted a surprising decline in revenue. Cisco's quarter was weakened by COVID lockdown measures in China and the Russia-Ukraine war.