(NewsNation) — Everyone is worried about inflation. But while most of us are concerned about how it’s impacting gas prices and the cost of groceries, Wall Street is focused on how it will eat into corporate profits.

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%.

Two back-to-back quarterly reports from Target and Walmart fueled investor fears of rising inflation negatively impacting those profits and consumer demand.

Target reported first-quarter earnings that were far lower than expected on Wednesday, citing higher fuel costs and compensation cost. Shares dropped almost 25% on that news.

This comes after Walmart also fell short of expectations, citing higher fuel and labor costs as well. Walmart shares have dropped 18% in the past two days.

Wages are up more than 5% from a year ago, but inflation is still outpacing them. People have less money to spend on non-essential at stores like Target and Walmart.

And then there’s gas. The diesel fuel that’s used by delivery trucks is at a record high of $5.58. That’s more than $2.40 higher than it was a year ago.

If the companies have to pay higher wages to retain their employees and then pay even more to get their products to stores and to consumers, that money is coming out of their bottom lines.

And that has Wall Street scared.

The Associated Press contributed to this report.