Inflation Tops Long List of Investors' Concerns, Survey Says

U.S. stocks are falling, failing to hold on to the morning's gains, amid fresh global concerns including claims of new cyberattacks against Ukrainian banks and government websites.

The S&P 500, which fell into correction territory yesterday, is on track for its fourth consecutive losing session. Recent volatility has led to a pullback in purchases of stocks and cryptocurrencies, Investopedia's latest investor sentiment survey found.

Investors continue to monitor events in Ukraine and the potential impact of sanctions from the U.S. and its allies against Russia. Fuel prices are rising again on concerns about supply disruptions, with oil futures up almost 1% and natural gas prices more than 2% higher. That's lifting shares of Chevron Corporation (CVX) and other energy companies, with the S&P 500 Energy Sector Index gaining 1.7%.

Shares of airlines and cruise lines are falling on worries about higher costs for fuel. Gold and silver futures are rising again as a safety play against the geopolitical risk.

Shares of Lowe's Companies, Inc. (LOW) are gaining on its strong earnings and 2022 guidance (more below), but shares of other retailers are down. Ross Stores, Inc. (ROST) and The TJX Companies, Inc. (TJX) are among the worst-performing stocks in the S&P 500. Shares of Starbucks Corporation (SBUX) are lower as employees at more locations push to unionize. Tech company stocks are losing ground, with Tesla, Inc. (TSLA) shares among the biggest decliners, down 4%.

The yield on the 10-year Treasury note is up to 1.96%. Major cryptocurrencies are bouncing back from their recent sell-off. The price of Bitcoin (BTCUSD) is 2% higher. The euro lost earlier gains against the dollar and is now lower.

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Chart of the Day: Still Bullish, Despite Dips

Rampant inflation, concerns about interest rate hikes, geopolitical uncertainty, and a massive sell-off in tech stocks and risky assets have rattled investor confidence in recent weeks. The volatility has led to a pullback in purchases of stocks and cryptocurrencies, and an increase in exchange-traded funds (ETFs), index funds, and commodities, according to the latest investor sentiment survey of Investopedia's daily newsletter readers. 

Forty percent of our readers said that recent market events prompted them to make "safer" investments—an eight-percentage-point increase from our November 2021 survey results, and the highest levels we have seen since October 2020.

Investors' Top Concerns

Inflation remains the number one concern among our readers, which shouldn't come as a surprise, given that it's rising at the fastest pace in 40 years here in the U.S. Inflation and rising interest rates dominate our readers' list of concerns, followed by geopolitical conflicts. Our survey was fielded as tensions between Russia and Ukraine escalated, which likely exacerbated those fears. It's also notable that our readers are less concerned about the spread of new COVID-19 variants, with only 34% of respondents listing that among their top worries.

Still Bullish, Despite Recent Pain

Our readers, who are either self-directed investors or working with advisors, have always been the bullish type. The steep but quick bear market in April of 2020 tested their fortitude, but they have largely been optimistic about future returns in the stock market. The recent correction in tech stocks and the rise of Treasury bond yields has done little to shake their confidence in recent weeks. Fifty-two percent of our readers expect gains in the S&P 500 over the next six months, with 25% of them expecting gains of 5% or greater. In fact, 63% of respondents said they are "buying the dip," while only 31% said they've been selling and taking profits.

Stock of the Day: Lowe's (LOW)

A big jump in purchases by contractors helped Lowe's post better-than-expected profit and sales in the fourth quarter. The second-largest U.S. home improvement retailer also boosted its full-year guidance.

Lowe's reported earnings per share (EPS) of $1.78, with sales rising 5% to $21.3 billion. Both beat analysts' forecasts. Comparable store sales were also up 5%, with U.S. comparable store sales higher by 5.1%. Those exceeded estimates as well. Professional sales soared 23%.

CEO Marvin Ellison noted that Lowe's remains confident in the long-term strength of the home improvement market and the company's ability to expand operating margin.

Raising Guidance

Lowe's raised its 2022 EPS forecast to $13.10 to $13.60, up from its previous estimate of $12.94. It increased its full-year sales estimate to $97 billion to $99 billion.

Lowe's shares are up 3% and are 28% higher in the past year. Shares of rival The Home Depot, Inc. (HD) sank yesterday after the retailer said it anticipated only modest growth in 2022. Its shares are lower again today.