The New York Stock Exchange ended Friday lower at a two-month low, troubled by FedEx’s profit warning and the prospect of a string of more sharp rate hikes that cast doubt on the US economy’s ability to land softly.
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The Dow Jones fell 0.45% to 30,822.43 points, the Nasdaq index fell 0.90% to 11,448.40 points and the S&P 500 index fell 0.72% to 3,873.33 points.
Since its summer high in mid-August, the S&P 500 is down nearly 11% and is down 19% year-to-date.
“Markets remain nervous,” Schwab analysts commented in a note, a statement “made worse by FedEx’s bleak picture.”
The Courier Group released lower-than-expected results Thursday after the stock market and ahead of time. Stock FedEx was lowered, losing 21.39% to $161.04 in one session.
Managing Director Raj Subramaniam spoke of a deterioration in the macroeconomic environment at the end of the quarter that ended at the end of August. “We’re seeing volume down across all segments globally,” the executive said in an interview with CNBC.
He assumes that the global economy will soon go through a recession. In view of the uncertainty about the economic situation, the group has withdrawn its forecast for the year.
“FedEx’s warning was a big factor today,” said Tom Cahill of Ventura Wealth Management.
For him, that adds to a set of lackluster macroeconomic indicators, including retail sales on Thursday, which fell 0.3% in a month, excluding auto and parts sales.
“The data trend is in the wrong direction,” said Tom Cahill. “It looks like consumers are starting to ease their spending.”
Consumption accounts for more than two-thirds of America’s gross domestic product (GDP), a proportion significantly higher than any other major industrialized country.
Sentiment on the day was not helped by the University of Michigan consumer confidence index, which had risen since August, but analysts disappointed.
Wall Street is watching with concern the rise in bond yields, which has accelerated this week as operators’ expectations for monetary policy are recalibrated, believing that the US Federal Reserve (Fed) will hit even harder than expected.
The US 10-year Treasury yield edged down to 3.45% from 3.44% the previous day.
Technology companies built on a sustainable growth model are very sensitive to funding conditions, which have tightened significantly with the Fed’s interest rate hike.
Several of the tech flagships fell to their yearly lows on Friday, such as Alphabet (-0.26%) or Meta (-2.18%), which had not seen valuation levels since the coronavirus pandemic began.
On the other hand, so-called defensive, i.e. less economically sensitive, stocks held their ground, in particular the cable network operator Comcast (+1.53%), McDonald’s (+0.57%), Johnson and Johnson (+1.53%). or Merck (+1.12%).
Uber fell sharply (-3.62% to $31.93) after the company reported a “cybersecurity incident”. According to the New York Times, an 18-year-old hacker infiltrated the vehicle reservation platform’s internal network, gaining access to source code and emails, among other things.
The setbacks of its competitor in the car with driver (VTC) market also weighed on Lyft (-4.24%).
Similarly, UPS was linked to the fall of FedEx, falling 4.48% to $176.71.
General Electric suffered (-3.66% to $66.39) after CFO Carolina Dybeck said the conglomerate continued to suffer from supply and supply chain issues that could limit the group’s benefits.
The action of photo agency Getty Images fell after the release of a document ahead of a capital increase with the market regulator SEC (-36.40% to $8.49).