Stocks closed sharply lower in the overnight session on Wall Street on Wednesday as dismal results of the firm Target renewed fears that inflation is battering US companies.

The S&P 500, the benchmark for many index funds, slumped to witness its biggest single-day crash since June 2020. Tech heavy Nasdaq gave up almost 5 percent while the Dow Jones slipped 1,100 points. Treasury yields also fell as investors sought safer ground.

Target lost a quarter of its value, dragging other retailers down with it, after saying its profit fell by half in the latest quarter as costs for freight and transportation spiked. This is a day after Walmart cited inflation for its weak quarterly results.

The US dollar gained ground as the sell-off in risk assets boosted the safe-haven appeal of the greenback, which was on pace to snap a three-session losing streak, a day after Fed Chair Jerome Powell pledged the US central bank would ratchet up rates as high as needed to combat rising inflation.

Oil prices rose, recovering from early losses, as lingering fears over tight global supplies outweighed fears over slower economic growth as highlighted by slumping global shares.

Watch the accompanying video of CNBC-TV18’s Prashant Nair for more details

-With agency inputs

For the latest stock market updates, follow CNBCTV18.com's blog here

First Published:May 19, 2022 8:28 AM IST