Traders work at the New York Stock Exchange (NYSE), July 25, 2022.

Brendan McDermid | Reuters

Here are the most important news investors need to start the trading day:

1. Stock futures slide

US stock markets were set to fall on Tuesday morning after Walmart cut its profit forecast on Monday (see below for details), sending shockwaves through the retail sector. The stock has shown signs of life in recent weeks, but it’s still on shaky ground after a terrible first half of the year. The major indexes were mixed on Monday, with the Dow rising, the S&P 500 essentially flat, and the Nasdaq falling. The busy salary schedule continues. General Motors, McDonald’s and Coca-Cola made the announcement before Tuesday’s call. Google parent Alphabet, Microsoft and Chipotle are set to announce after the market closes. Investors will also be looking at new economic data on Tuesday morning, with May’s Case-Shiller home price index due at 9am ET, while data on consumer confidence and new home sales are due at 10am.

2. Walmart warning

Walmart Rollback pricing signs are displayed while customers shop during the grand opening of a new Wal-Mart Stores in Torrance, California.

Patrick Fallon | Bloomberg | Getty Images

Walmart, the largest retailer and grocer in the United States, gave recession-worried people another reason to worry when it cut its earnings forecast after a call on Monday. According to the company, shoppers are spending more on essentials such as groceries, which typically have low margins, and are avoiding items such as electronics. Walmart, in turn, is cutting prices on items it stocks on the shelves, such as clothing, which is also hurting its bottom line. The company’s shares fell. The warning also affected other retailers, including Target and e-commerce giant Amazon. Shares of both companies also fell during non-market hours.

3. McDonald’s and Coca-Cola report

The McDonald’s logo is seen on a restaurant in Arlington, Virginia, on January 27, 2022.

Joshua Roberts | Reuters

Two major consumer goods companies reported their quarterly results Tuesday morning, giving investors a sense of how people are coping with high inflation. Coca-Cola beat analysts’ estimates on the top and bottom lines as it raised prices to offset higher costs for things like freight, aluminum and corn syrup. Meanwhile, McDonald’s reported same-store sales rose 3.7% in the United States, beating StreetAccount estimates of 2.8%. According to McDonald’s, the growth was largely driven by some price increases and the popularity of value propositions.

4. Supply chain worries GM

Signs advertising the Buick and GMC brands owned by General Motors are seen at a car dealership in Queens, New York, on November 16, 2021.

Andrew Kelly | Reuters

General Motors on Tuesday posted earnings that fell short of Wall Street’s expectations. The Detroit automaker said a parts shortage prevented it from delivering nearly 100,000 vehicles in the last quarter. The company, however, maintained its profit forecast for the year. GM is also bracing for a potential recession, according to CEO Mary Barr. “We have also modeled many downturn scenarios, and we are prepared to take targeted action if and when necessary,” she said in the release. Crosstown rival Ford is due to report results after the bell on Wednesday.

5. The two-day Fed meeting begins

Federal Reserve Chairman Jerome Powell testifies before the Senate Banking, Housing and Urban Affairs Committee’s hearing on the “Semiannual Report on Monetary Policy to Congress” on Capitol Hill in Washington, DC, U.S., June 22, 2022.

Elizabeth Franz | Reuters

Even as they digest this week’s slew of earnings reports, investors will be on the lookout for what the Fed will say Wednesday afternoon after the two-day meeting concludes. Most expect the central bank to raise rates by 75 basis points (each basis point is equal to 0.01 percentage point), but with inflation still rising, market watchers are looking for clues that Chairman Jerome Powell and his fellow policymakers will do further. “I think it will be mixed. He will be speaking on the eve of what could be another quarter of a drop in real GDP,” Vincent Reinhart, chief economist at Dreyfus and Mellon, told CNBC.

CNBC’s Sarah Min, Melissa Repko, John Roseveer, Amelia Lucas and Ian Kritzberg contributed to this report.

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