FedEx warning slams S&P 500 and Nasdaq

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  • US stocks fell on Friday, heading for a second straight decline.
  • Major indexes were in line for weekly losses of more than 2% each.
  • FedEx shares were hit hard after the logistics company issued a profit warning and withdrew its guidance.

U.S. stocks fell on Friday as the gloomy FedEx outlook issued a warning about global economic health just days before the Federal Reserve is set to offer its next interest rate hike in 2022.

The S&P 500, Nasdaq Composite and Dow Jones Industrial Average posted their second straight loss and are on course for weekly declines.

FedEx shares fell sharply after the package delivery company issued a profit warning for its fiscal first quarter and dropped its profit forecast for the year. He said results were impacted by weak global volumes that accelerated in the final weeks of the quarter. CEO Raj Subramaniam told CNBC said Thursday night that he predicted a recession for the global economy.

Here’s where the U.S. indices stood at the 9:30 a.m. opening bell on Friday:

“More and more companies are warning about earnings, lowering expectations for the rest of the year and next year,” Giuliano Gasparet, head of equities at Generali Insurance Asset Management, said in a note.

Meanwhile, Wall Street’s major indexes this week were on course to fall more than 2% each, largely hit after August inflation at 8.3% came above expectations. “The bond market suddenly reacted with an upward trend in yields and this had a negative impact on risky assets which sold off in sync,” Gasparet said. Further deterioration in macro data could justify further weakness ahead for equities, he said.

The Federal Reserve will meet on September 20-21 and is expected to raise the federal funds rate by 75 basis points. The Fed has raised rates four times this year to keep inflation under control.

Here’s what else is happening today:

In raw materials:

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