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STORY: U.S. stocks sank on Wednesday in the biggest one-day declines since June 2020 for the Dow and S&P 500, after results from Target flashed a warning sign that there would be no immediate relief from surging inflation.

The Dow fell 3.5%, losing more than 1,100 points. The S&P 500 ended 4% lower, while the Nasdaq lost roughly four and three quarters of a percent.

Target's first-quarter profit fell by half and the retail giant warned of a bigger margin hit on rising fuel and freight costs, sending its shares 25% lower in their worst session since the Black Monday crash of 1987.

Liz Miller is president of Summit Place Financial Advisors.

"This bashing of Target in the market today, that is dragging the entire market down, feels like quite an overreaction. And I think it's an overreaction because there are pockets of investors that were surprised and still haven't fully thought about how higher costs run through our economy when inflation is high.”

Fed Chair Jerome Powell vowed on Tuesday that the U.S. central bank will raise rates as high as needed to kill a surge in inflation that he said threatened the economy.

On Wednesday, interest-rate sensitive megacap growth stocks added to recent declines, with Apple, Tesla and Amazon losing more than 5, 6 and 7% respectively.

The S&P 500 is now down about 18% so far in 2022 and the Nasdaq has fallen about 27%.

The Wells Fargo Investment Institute on Wednesday said it expects a mild U.S. recession at the end of 2022 and early 2023.