It was a wild ride for the U.S. stock market on Monday.
After the Dow Jones Industrial Average plunged more than 1,000 points at one point, stocks ended the day in positive territory, closing up 99 points.
Among retail and footwear stocks, the most notable movers were department stores, with Kohl’s surging 36% on news that it has received letters of interest from two potential acquirers. The buzz around Kohl’s fueled retail rivals as well. Nordstrom saw shares increase almost 13%, while Macy’s was up 18%.
More broadly, Foot Locker saw shares rise 8%, while Caleres shares shot up 10%, Skechers was up about 5%, while Nike and Deckers saw shares inch up more than 2%.
Investors are bracing for another week of uncertainty as the corporate earnings season kicks off and the Federal Reserve holds its first meeting on interest rates.
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In general, footwear stocks tend to fluctuate more than broader indexes in the market, often reacting acutely to changes in consumer spending or sentiment, explained Matt Priest, president and CEO of the Footwear Distributors and Retailers of America (FDRA).
Right now, consumer sentiment is experiencing a low. In January, the University of Michigan’s Consumer Sentiment Index showed that U.S. consumer sentiment dropped 2.5% from the month prior. This brought the index to its second-lowest point in a decade, with the lowest occurring in November of 2021. Consumers’ assessment of current economic conditions also dropped in January.
“With these signs of a wavering consumer coupled with inflation jumping at its fastest in 40 years, stock prices for consumer cyclicals tend to wobble,” Priest told FN.
He added that as of Friday, the Dow Jones U.S. Footwear Index was down more than 20% from a record high from early November and is sinking to its lowest in nearly seven months. (Stocks rebounded Monday.)
Despite the volatility, market watchers have remained hopeful for some brands to maintain their momentum through 2022, such as Lululemon, Tapestry, Steve Madden and Nike.
