Wall Street sinks after Walmart's profit warning

STORY: U.S. stocks ended sharply lower Tuesday after a profit warning from Walmart dragged down retail shares and exceptionally weak consumer confidence data fueled fears about higher inflation impacting spending.

The Dow fell seven tenths of a percent. The S&P 500 dropped more than a percent, while the Nasdaq lost nearly 2%.

Data on Tuesday showed that U.S. consumer confidence dropped to a near 1-1/2-year low in July.

But Jonathan Hirtle, chairman and founder of Hirtle, Callaghan & Co, said that might signal a time to buy stocks.

"Consumer confidence, our research indicates, is often lowest before a market rally, which makes sense when, you know, when you think about it. Equity investors, retail investors being pessimistic is always considered a bullish sign, a positive sign for stocks. When you get consumer confidence at its highest level is usually coincident with a bubble in assets. So we don't really find that the consumer sentiment indicates what's going to happen to the market. And we would say, actually, that most of the data indicates is when consumer sentiment is negative, it may be time for a stock market rally."

Shares of Walmart ended more than 7.5% lower after the retailer cut its full-year profit forecast late on Monday, blaming surging prices for food and fuel.

That took down shares of Target and Amazon, which was among the biggest drags on the Nasdaq and S&P 500.

Bucking the trend were shares of Coca-Cola, which gained after the company raised its full-year revenue forecast.

Shares of McDonald's also rose after the burger chain beat quarterly expectations.

Investors are also keeping a close eye on the Fed, which started its two-day meeting and, on Wednesday, is expected to announce a 75-basis-point interest rate hike to fight inflation.