- US stocks dropped Friday, heading toward a second straight decline.
- The major indexes were in line for weekly losses of more than 2% each.
US stocks fell Friday as FedEx's dreary outlook flashed a warning on global economic health just days before the Federal Reserve is set to deliver its next interest rate increase of 2022.
The S&P 500, the Nasdaq Composite and the Dow Jones Industrial Average moved toward their second straight loss and are poised for weekly declines.
FedEx shares fell sharply after the package delivery company issued a profit warning for its fiscal first quarter and ditched its earnings guidance for the year. It said results were hurt by global volume softness that accelerated in the final weeks of the quarter. CEO Raj Subramaniam told CNBC said late Thursday he foresees a recession for the global economy.
Here's where US indexes stood at the 9:30 a.m. opening bell on Friday:
- 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.
Meanwhile, Wall Street's major indexes this week were on course to fall by more than 2% each, hurt largely after August inflation at 8.3% came in above expectations. "The bond market suddenly reacted with yields trending higher and this had a negative impact on risky assets which sold off in a synchronized way," Gasparet said. Further deterioration of 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 fed funds rate by 75 basis points. The Fed has raised rates four times this year to tame inflation.
Here's what else is happening today:
- The German government seized three oil refineries in the country owned by Russian energy giant Rosneft, its latest move to deal with the mounting European energy crisis.
- The boss of a "Black Swan" fund warned the Fed's rate hikes could cripple markets and the economy - and cause a bigger problem than inflation.
- The British pound sank to its lowest level against the US dollar in nearly four decades after an unexpected drop in retail sales stoked a fresh wave of UK recession fears.
In commodities:
- West Texas Intermediate crude gained 1.3% to $86.17 per barrel. Brent crude, the international benchmark, tacked on 1.6% at $92.30.
- Gold slipped 0.2% to $1,673.60 per ounce.
- The 10-year Treasury yield shed 1 basis point to 3.44%.
- Bitcoin edged up 0.1% to $19,856.12.