FedEx shares fell 24% after the shipping giant announced cost-cutting steps in response to low worldwide cargo volumes.
Stocks plummeted Friday as Wall Street headed for a significant loss week, as traders digested FedEx’s dismal earnings warning about the global economy.
The Dow Jones Industrial Average fell 306 points, or 1%, on Monday. The S&P 500 fell 1.2%, and the Nasdaq Composite fell 1.6%.
FedEx shares fell 24% after the transportation firm retracted its full-year estimate and announced cost-cutting steps to deal with lacklustre worldwide shipment volumes as the global economy “seriously deteriorated.”
Transport equities are often seen as a leading indicator for both the stock market and the economy. FedEx cited difficulties in Asia as one of the primary reasons for its pessimistic outlook. UPS and XPO Logistics shares declined 4% and 7%, respectively, while Amazon’s stock slid 3%.
FedEx’s decision comes just days after the United States reported higher-than-expected inflation on Tuesday, raising fears that the Federal Reserve would be compelled to instigate a recession to temper prices. The Dow fell more than 1,200 points as a result of the data.
“There is a lot of concern about how the global economy may influence the US economy right now, although the US economy is dealing with its own set of extremely significant difficulties.” “I believe that dynamic has awakened people,” said Callie Cox, US investment analyst at eToro.
The three main averages were on track for their fourth down week in a row, as a recovery rally seems to be a bear market bounce. The Dow Jones Industrial Average is down 4.7% this week, while the S& P 500 is down 3.8%. The Nasdaq Composite is down 6.2% this week, on track for its most significant weekly loss since June.
Sarah Min helped with reporting.
