Just after submitting my CV to graduate school for masters admission, I realized that there was one spelling mistake on the first page of my CV. I misspelled the word 'merchandising'(missed the h). Is it going to be a major issue for my application?
I'll give the same answer as Allure, but for a very different reason. Not only is it common, but most people won't notice it. And of the few that do, fewer yet would think it an important enough issue to bother with.
"Egad, this person misspelled a word. Horrors."
Nope, it ain't gonna happen.
But, you also need to be assured that no single thing, whatever it is, would likely derail an application (yes, a few obvious exceptions). Your acceptance is based on a judgement and the judges try to look at a complete picture of an applicant; both their past accomplishments and the likelihood of success in the future. The CV (as a whole), your statement of purpose, your grades and test scores, your letters of recommendation. Each of those contribute to a (fairly) complete picture. Flaws or issues in one part can be balanced and overcome by the positive and supporting parts elsewhere.
Relax. The judges are no more perfect than you are.
Check this paper out. As of time of writing Google Scholar says it's received 3871 citations, which puts it well into the upper echelon of papers. And yet on page 50 there is ...
To diagionalize the remaining four dimensions, we transform to a new set of variables
Obvious typo, but it's far from uncommon and it doesn't stop people from reading and citing the paper.
Exception: if you misspell a key word - for example if you apply to John Hopkins University instead of Johns Hopkins University - then the damage to your application can be more severe.
I'll give a different answer, which is deliberately not an answer to the exact question you asked.
Can you fix it? Can you overwrite your initial CV on the web application form, or ask the admissions administrator to replace it for you, or something like that?
If so, then you should fix it, because you're trying to present your best self with your application.
If not, then it doesn't matter whether it's an issue—it's out of your hands.
For the purpose of admissions it's unlikely to have any impact.
If this were to support a job application, where a recruiter might have 500 resumes in front of them, and 95% of those resumes end up in the trash after one pass, you want to make every effort to prevent yours from being trashed, and every effort should be put into making sure your application package is as perfect as you can get it.
OP asks, will the spelling error be a "major issue for my application"
The spelling error on the first page is evidence that OP might not have read their own paper prior to submission. That is demonstrative of a lack of attention to detail. Whether writing a simple email or important application, take the time to read it at least once to catch simple errors. Especially if OP's spelling check language isn't set to English. Such a drafting process is also an opportunity to find areas for general improvement.
Whether or not the reader(s) of OP's application cares about the error enough to let it affect their opinion of the application as a whole, is not knowable.
There are two main causes for incorrect spelling: You made a mistake, a typo, or you didn't know how to spell the word correctly. "mercandising" seems to be a typo. That's much more forgivable. Getting "your", and "you're" wrong would be more of a problem.
I did review someone's CV before it was sent out and noticed "wether" was used instead of "whether". You can figure out yourself why the spelling checker didn't flag it. Would have been embarrassing if the reader knew the word or looked it up (like I did).
Personally, I'd like to say I would ignore such a mistake, and indeed my eyes would likely skip it. But if I noticed it, it would raise my brows. I'd suspect that either you are not using a spell checker on an important document (which would make me think less of you), or you've ignored some warning given to you (and spell checkers in fact do give lots of false alarms depending on context).
In both cases, this is an inconclusive sign of sloppiness. Which means I would have insufficient evidence to assume either case to be applicable to you. I would then make a conscientious effort to ignore those suspicions. I do believe that only an asshole would be picky on such minor problems (but you will find plenty of those people over your career). I've once worked with reviewing some extensive technical documentation written by non-native english speakers which had been updated plenty of times. I had express instructions to ignore minor typos such as "mercandise".
Then again, if those typos do create interpretation issues or if they are common, I'd let myself conclude that evidence is enough for me to consider that either you have bad procedures (i.e. you don't use spell check at all), or that you have been very sloppy/lazy (you didn't pay attention, you've wrote the CV overnight right before the deadline or similar).
So, if you are concerned, recheck the CV as whole using different spell-checkers (word, grammarly, etc.). If that was your only mistake, rest assured this shouldn't matter. If you find more than 3 spelling mistakes (or two major grammar ones), learn your lesson.