Shares in New York fell on fears of a recession amid growing concerns from the global shipping company FedEx ahead of the Fed’s monetary policy meeting scheduled for next week.
At 9:48 am on the New York Stock Exchange (NYSE) on the 16th (Eastern time), the Dow Jones Industrial Average registered 30,652.00, down 309.82 points (1.00%) from the battlefield.
The Standard & Poor’s 500 index fell 53.23 points (1.36%) to 3,848.12 and the Nasdaq index, which focuses on tech stocks, fell 198.51 points (1.72%) to 11,353 , 85 from the battlefield.
The FedEx warning further exacerbated investor sentiment as downward pressure on the economy increased due to continued inflation and intense Fed tightening.
FedEx’s first quarter financial results, which ended in late August, were released the day before but fell short of market expectations.
The company withdrew its annual earnings forecast, which it proposed in June, saying high volatility makes it difficult to forecast earnings.
Furthermore, considering that the global economy is seriously deteriorating, we have decided to take cost-cutting measures in response to a decrease in global shipments.
FedEx shares fell more than 20%.
The continued upward trend in government bond yields also has a negative impact on share prices.
The two-year Treasury bond yield exceeded 3.9%.
This is the highest level since October 2007.
The unusual pace of Fed rate hikes is driving short-term yields skyrocketing.
News from Europe is also negative.
The Eurozone Consumer Price Index (CPI) increased 9.1% in August from the previous year.
This is on the same level as the preliminary level, surpassing 8.9% the previous month.
UK retail sales were down 1.6% in August from the previous month, the decline broadening from 0.4% the previous month.
Retail sales in August have declined the most since December last year, pushing the pound to its lowest level in 37 years against the dollar.
All 11 sectors of the S&P 500 fell and stocks related to energy, industry and materials (materials) fell by more than 2%.
Shares of its rivals UPS and XPO Logistics also fell more than 5% and 7%, respectively, on news of FedEx withdrawing its annual forecasts.
Shares of General Electric (GE) fell more than 4% as it said supply chain problems will continue to impact its earnings.
New York stock market experts said the FedEx news worsened investor sentiment.
“FedEx has traditionally been a wake-up call,” Robert Titer, director of Silvercrest Asset Management, told CNBC.
He said the FedEx case is an important story about future corporate profits, but that profit margins will vary from company to company.
“FedEx expects the US economy to enter a recession, which has made traders more cautious,” said Naim Aslam, Abba Trade’s chief market analyst.
“Other companies are likely to post similar messages in the next few days,” he said.
“It is true that more and more CEOs are feeling pessimistic about the global economy,” added Aslam.
European stocks also fell.
The German DAX was down 1.78% and the UK’s FTSE was down 0.38%.
The pan-European STOXX600 index is down 1.37%.
International oil prices have risen slightly.
The October price of West Texas Intermediate (WTI) crude oil rose 0.07% to $ 85.12 a barrel and the November Brent price rose 0.44% to $ 91.24 a barrel.
