Just days before the Federal Reserve is scheduled to announce its next interest rate hike of 2022, US equities declined on Friday as a result of FedEx’s gloomy prognosis, which flashed a warning on the state of the global economy.
The S&P 500, Nasdaq Composite, and Dow Jones Industrial Average are headed for weekly losses as they drew closer to their second consecutive losses.
FedEx shares plunged after the package transportation business cut its earnings forecast for the year and issued a profit warning for its fiscal first quarter. It claimed that a global volume softening that increased in the last few weeks of the quarter impacted profits. Raj Subramaniam, the CEO, told CNBC late on Thursday that he believes the world economy would experience a recession.
The following is the state of the US indices as of Friday’s 9:30 a.m. opening bell:
S&P 500: 3,853.99, down 1.21%
Dow Jones Industrial Average: 30,602.34, down 1.16% (359.48 points)
Nasdaq Composite: 11,377.95, down 1.51%
“More and more companies are warning on their profits, lowering down expectations for the remaining part of the year and next year,” Giuliano Gasparet, head of equity at Generali Insurance Asset Management, said in a note.
Wall Street’s major indexes, meanwhile, were on track to decline by more than 2% each this week, largely as a result of August inflation coming in higher than anticipated at 8.3%. Risky assets fell off synchronously as a result of the bond market’s abrupt reaction, which resulted in yields going higher, according to Gasparet. According to him, additional deterioration in the macroeconomic statistics could justify further weakness for stocks.
On September 20-21, the Federal Reserve will meet, and it is anticipated that they will increase the fed funds rate by 75 basis points. To control inflation, the Fed has increased rates five times this year.
This article was originally posted here