NEW YORK (AP) — Wall Street headed for more losses at the open following the previous day’s rout amid persistently high inflation and its potential effect on corporate profits and consumer spending.

Futures for the S&P 500 and Dow Jones Industrial Average slid 0.9% Thursday before the bell.

Shares in Europe and Asia fell sharply following plunging U.S. markets.

Germany’s DAX was down 1.6% at midday, while the CAC 40 in Paris declined 1.7% and Britain’s FTSE 100 shed 2.1%.

On Wednesday, the Dow sank more than 1,100 points, or 3.6%. The S&P 500 had its biggest drop in nearly two years, shedding 4%, and the tech-heavy Nasdaq fell 4.7%.

The benchmark index is now down more than 18% from the record high it reached at the beginning of the year. That’s just shy of the 20% decline that’s considered a bear market.

“The sentiment in the market is highly negative as traders and investors are largely concerned about an economic downturn and soaring inflation,” Naeem Aslam of Avatrade said.

Rising interest rates, high inflation, the war in Ukraine and a slowdown in China’s economy have caused investors to reconsider the prices they’re willing to pay for a wide range of stocks, from high-flying tech companies to traditional automakers.

The last bear market happened just two years ago, but this would still be a first for those investors that got their start trading on their phones during the pandemic. For years, thanks in large part to extraordinary actions by the Federal Reserve, stocks often seemed to go in only one direction: up. Now, the familiar rallying cry to “buy the dip” after every market wobble is giving way to fear that the dip is turning into a crater.

The Federal Reserve is trying to temper the impact from the highest inflation in four decades by raising interest rates. Many other central banks are on a similar track. But the Bank of Japan has stuck to its low interest rate policy and the gap between those benchmark rates of the world’s largest and third-largest economies has pushed the dollar’s value up against the Japanese yen.

Japan reported a trade deficit for April as its imports ballooned 28%. The shift reflects surging energy costs amid the war in Ukraine and a weakening of the yen against the U.S. dollar.

The Nikkei 225 in Tokyo lost 1.9% to 26,402.84 and the Hang Seng in Hong Kong dropped 2.5% to 20,120.60. In South Korea, the Kospi shed 1.3% to 2,592.34, while Australia’s S&P/ASX 200 gave up 1.7% to 7,064.50.

The Shanghai Composite index reversed earlier losses, gaining 0.4% to 3.096.96.

On Wednesday, retailer Target lost a quarter of its value after reporting earnings that fell far short of analysts’ forecasts. Inflation, especially for shipping costs, dragged its operating margin for the first quarter to 5.3%. It had been expecting 8% or higher.

The company warned that its costs for freight this year would be $1 billion higher than it estimated just three months ago.

The report comes a day after Walmart said its profit took a hit from higher costs. The nation’s largest retailer fell 6.8%, adding to its losses from Tuesday.

Target and Walmart each provided anecdotal evidence that inflation is weighing on consumers, saying they held back on purchasing big-ticket items and changed from national brands to less expensive store brands.

The weak reports stoked concerns that stubbornly rising inflation is putting a tighter squeeze on a wide range of businesses and could cut deeper into their profits.

Other big retailers also have racked up hefty losses.

The data are not entirely consistent. On Tuesday, the market cheered an encouraging report from the Commerce Department that showed retail sales rose in April, driven by higher sales of cars, electronics, and more spending at restaurants.

Investors worry the Fed could trigger a recession if it raises interest rates too high or too quickly. Worries persist about global growth as Russia’s invasion of Ukraine puts even more pressure on prices for oil and food while lockdowns in China to stem COVID-19 cases worsens supply chain problems.

In other trading, benchmark U.S. crude oil declined $1.27 to $108.32 per barrel in electronic trading on the New York Mercantile Exchange. It dropped $2.81 to $109.59 on Wednesday.

Brent crude, the basis for pricing for international trading, slipped 71 cents to $108.40 per barrel.

The dollar fell to 127.92 Japanese yen from 128.20 yen late Wednesday. The euro strengthened to $1.0514 from $1.0464.

By OLEKSANDR STASHEVSKYI and CIARAN McQUILLAN

KYIV, Ukraine (AP) — Hundreds of Ukrainian fighters defending the last holdout in Mariupol were evacuated to areas controlled by Russian-backed separatists and officials worked Tuesday to get the rest out, signaling the beginning of the end of a siege that became a symbol of Ukrainian resistance.

Russia called the operation a mass surrender. The Ukrainians avoided using that word — but said the garrison had completed its mission.

More than 260 fighters — some severely wounded — were pulled from a steel plant on Monday that is the last redoubt of Ukrainian fighters in the city and transported to two towns controlled by separatists, officials on both sides said. Other fighters — their precise numbers unknown — remain inside the Azovstal steelworks that sprawl over 11 square kilometers (4 square miles) in a city otherwise controlled by Russian forces.

The complete capture of the plant would mark a significant milestone. It would give Russia its biggest victory of the war yet and could help free up forces for offensive action elsewhere in the industrial heartland of eastern Ukraine that is now Russia’s focus after a series of setbacks.

“Ukraine needs Ukrainian heroes to be alive. It’s our principle,” Ukrainian President Volodymyr Zelenskyy said in announcing that the evacuation had begun from the relentlessly bombarded mill and its warren of tunnels and bunkers.

“There are heavily wounded among them. They are receiving medical help,” he said. “The work continues to bring the guys home and it requires delicacy and time.”

Ukraine Deputy Defense Minister Hanna Maliar said 264 fighters were evacuated from the plant, including 53 “heavily wounded” brought to a medical facility. Russian Defense Ministry spokesman Igor Konashenkov gave slightly different numbers: 265 evacuees, 51 of them seriously wounded. The discrepancy couldn’t immediately be explained.

After nightfall Monday, several buses pulled away from the steel mill accompanied by Russian military vehicles. Russian Defense Ministry video of some evacuees did not show any that were armed. The video shows troops patting down and searching the fighters. Some were on stretchers as they were loaded onto the buses.

Oleksandr Danylyuk, a Ukrainian former national security chief and finance minister, told the BBC that because Ukrainian forces were unable to liberate the plant, the negotiated evacuation to Russian-controlled territory had been “the only hope” for Azovstal’s defenders.

Those remaining in the plant are still “able to defend it. But I think it’s important to understand that their main mission is completed and now their lives need to be saved,” he said.

A full negotiated withdrawal could save lives on the Russian side, too, sparing Russian-backed troops from what almost certainly would be a bloody and difficult battle to wrest the labyrinth-like plant from Ukrainian control.

Danylyuk added that those evacuated should be swapped for Russian prisoners — but Vyacheslav Volodin, speaker of the lower house of the Russian parliament, said that there are “war criminals” among the plant defenders and they should not be exchanged but tried.

Maliar heaped praise on the fighters who survived in the plant for nearly three months and said it been impossible to liberate them “by military means.”

“Thanks to the defenders of Mariupol, we have gained critically important time to form reserves, to regroup forces and to receive aid from our partners,” she said. “Mariupol’s defenders have fully accomplished all missions assigned by the commanders.”

Russia has been plagued by setbacks in the war, most glaringly in its failure early on to take the capital of Kyiv. Much of the fighting has shifted to the Donbas region in the east but also has turned into a slog, with fighting village-by-village.

Strikes have also occasionally rocked other areas of the country. The western city of Lviv was rocked by loud explosions early Tuesday. Witnesses counted at least eight blasts accompanied by distant booms. The sky west of the city, which was under an overnight curfew, was lit up by an orange glow.

Howitzers from the U.S. and other countries have helped Kyiv hold off or gain ground against Russia, a senior U.S. defense official said. The official, who spoke on condition of anonymity to discuss the U.S. military assessment, said Ukraine has pushed Russian forces in the east to within 1 to 4 kilometers (a half-mile to 2.5 miles) of Russia’s border but could not confirm if it was all the way to the frontier.

In another setback for Moscow, Sweden’s decided to seek NATO membership following a similar decision by neighboring Finland. That is a historic shift for the countries, which have been nonaligned for generations.

On Tuesday, Swedish Foreign Minister Ann Linde signed the formal request to join the alliance, which will now be sent to NATO Secretary-General Jens Stoltenberg.

Stoltenberg has said the membership process for both could be quick — but President Recep Tayyip Erdogan of Turkey, a NATO member, has cast doubt on the process. He has objected to allowing Sweden and Finland to join NATO, saying they failed to take a “clear” stance against Kurdish militants and other groups that Ankara considers terrorists, and imposed military sanctions on Turkey.

All 30 current NATO members must agree to let the Nordic neighbors join.

Russian President Vladimir Putin said Moscow “does not have a problem” with Sweden or Finland as they apply for NATO membership, but that “the expansion of military infrastructure onto this territory will of course give rise to our reaction in response.”

Putin launched the invasion on Feb. 24 in what he said was an effort to check NATO’s expansion but has seen that strategy backfire.

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McQuillan and Yuras Karmanau reported from Lviv, Ukraine. Mstyslav Chernov and Andrea Rosa in Kharkiv, Elena Becatoros in Odesa and other AP staffers around the world contributed.

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Follow AP’s coverage of the war in Ukraine: https://apnews.com/hub/russia-ukraine