U.S. stocks opened sharply lower Friday, with a warning from FedEx Corp. weighing on sentiment, while investors also wait for another interest rate rise by the Federal Reserve next week.
How are stock-index futures trading?
The Dow Jones Industrial Average
dropped 353 points or 1.2%, to 30,609.
The S&P 500
shed 48 points, or 1.2%, to trae at 3,854.
The Nasdaq Composite
tumbled 188 points, or 1.6%, to 11,365.
Stocks were on track for steep weekly losses, with the Dow industrials down 3.7% through Thursday’s close, while the S&P 500 had dropped 4.1% and the Nasdaq Composite had shed 4.6%.
What’s driving the market?
shares were down 23.7% after the global shipper and economic bellwether late Thursday withdrew its annual outlook and forecast sharply lower quarterly profit and lower revenue. The news put pressure on other shipping stocks and dented overall investor sentiment, analysts said, as FedEx CEO Raj Subramaniam, told CNBC late Thursday that the global economy was likely headed for a recession.
Stock in rival UPS Inc.
slid 5.6%, while retailers such as Amazon.com Inc.
and Target Corp.
were also lower. FedEx’s gloom spread overseas with Deutsche Post AG
and Royal Mail PLC
“The fact that FedEx expects the US economy to enter into a recession has made traders trade carefully, and there aren’t many who are willing to buy the market,” said Naeem Aslam, chief market analyst at AvaTrade, in a note to clients.
“It is highly likely that we will see a similar message from other companies in the coming days as well, and that may make the overall sentiment even more adverse. The fact is that more and more CEOs are feeling pessimistic about the global economy, and this may not be the best environment for global markets to do well,” Aslam.
Another blow came from General Electric Co.
whose shares fell 5.2% after the company’s chief financial officer Carolina Happe said at an investor conference that continued supply-chain pressures were putting the conglomerate under pressure.
Investors have endured a tough week that included the worst one day losses since June 2020 for stock markets on Tuesday after a surprise jump in U.S. consumer price inflation in August that has many nervously looking towards next week’s Federal Reserve meeting. Some forecasts are even calling for a 100 basis-point rate hike next week.
Thursday’s data was a mixed bag with U.S. retail sales and weekly jobless claims offering signs that the economy is still holding steady, though two regional gauges of manufacturing slightly contracted.
The only data on tap Friday is the University of Michigan’s consumer sentiment index, due at 10 a.m. Eastern, with the report’s inflation expectations reading set to be closely eyed.
Technology stocks were again expected to lead the way south on Friday, as the two-year Treasury yield continued to trade more than 40 basis points above that of the 10-year yield. That so-called inversion often suggests market participants are expecting an economic slowdown.
The yield on the 2-year Treasury note was set for a seventh straight rise on Friday, a day after reaching its highest level since October 2007. The 2-year yield
was last up 4 basis points to 3.901%, while the 10-year yield
was up 1 basis point to 3.465%.
Jittery investors continued to push the dollar
higher, with the British pound
dropping below $1.14 for the first time in 37 years. The currency’s weakness was exacerbated by weaker-than-expected retail sales data.