U.S. stocks fell after Target reported sharply lower quarterly results stoking fears of wider economic malaise. 

The S&P 500 index declined 1.5% to 4,026.76 and the Nasdaq Composite index fell 1.8% to 11,770.48. 

The indexes are likely to close down for the first time in four days. 

Target Corp, a major retailer of food, groceries, and general merchandise, said higher freight costs and wages compounded supply disruptions in the quarter. 

However, the retailer added the consumer is healthy and spending more on items that are linked to experiences such as birthday parties and travel.  

The indexes have been on the defensive for the last seven weeks as rising fuel and food prices are leaving customers with less money to pay for discretionary items. 

Target's weak earnings follows Walmart's earnings on Tuesday after the largest retailer lowered expectations for the rest of the year. 

On the back of weak results from two leading retailers, stocks in the sector fell. 

Dollar General declined 12%, Dollar Tree fell 15%, Five Below plunged 8.4%, Kohl's Corp fell 8.4%, and Macy's fell 7.5%. 

Crude oil edged higher 56 cent to $112.91 on the expectations that China demand will resume in the next month. 

The yield on 10-year U.S. Treasury notes edged down but traded near 2.95%. 

Weekly mortgage applications declined 12% at the end of last week from the previous week and fell 15% from a year ago according to Mortgage Bankers Association. 

Separately, home builders association reported the confidence index declined 8 points to 69 in May, a fifth monthly decline in a row and lowest since June 2020. 

The single family starts in April declined 7.3% to 1.1 million units annual rate adjusted for seasonality factors, according to the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

The multifamily sector, which includes apartment buildings and condos, increased 15.3% to an annualized 624,000 rate. 

European markets turned negative on the growing worries of rising inflation and lagging central bank's response. 

The U.K. inflation accelerated to 9% in April from 7% in March driven by rising food and fuel prices, the Office of National Statistics said today. 

The 40-year high inflation is likely to peak in October around 10% before it declines.

Moreover, new car registration in the European Union declined for the fourth month in a row in April. the European Automobile Manufacturers' Association said today. 

New Passenger vehicle registration fell 20.6% in April after falling 20.5% in March. 

The April month data was the weakest since record keeping began except the pandemic year 2020. About 684,506 passenger vehicles were registered in April compared to 862,443 registrations a year ago. 

From January to April of 2022, new car registrations declined 14.4% across the EU, totaling 2,930,366 units. 

Supply disruptions and chip shortages weighed heavily on manufacturers. 

The DAX index declined 0.9% to 14,061.23, the CAC-40 index dropped 1% to 6,367.77, and the FTSE 100 index fell 0.4% to 7,485.98. 

Asian markets closed mixed after Japan reported GDP and industrial production data. 

Japan's GDP in the first quarter contracted at 1% annualized rate, the Cabinet Office said today. The preliminary data showed that the economy rose at 0.2% rate after adjusting for seasonality factors. 

The decline was less than the 1.8% fall estimated by many economists. The GDP growth data for the previous quarter was lowered to 3.8% increase from the 5.4% rise in the preliminary estimate. 

The weakness in international trade dragged the economic activities lower. 

Industrial production in March rose 0.3% after adjusting for seasonal factors, the report from the Ministry of Economy, Trade and Industry noted today. 

In Tokyo, the Nikkei index increased 251.45 or 0.94% to close at 26,911.20.