PARIS (Reuters) – The New York Stock Exchange opened lower on Friday, hit by the warning of the logistics and parcel delivery giant Fedex, which gave up its annual financial forecasts, citing a sluggish economic environment, while investors are already burned by the prospect of a sharp rate hike by the Federal Reserve (Fed) next week.
In early trading, the Dow Jones index lost 354.32 points, or 1.14%, to 30,607.5 points and the broader Standard & Poor’s 500 fell 1.17% to 3,855.35 points.
The Nasdaq Composite lost 1.47%, or 169.33 points, to 11,383.02.
FedEx said late Thursday it expects business conditions to deteriorate further in the second quarter after a decline in the first three months of its staggered annual fiscal year, despite an ongoing cost-cutting program.
The American group, considered a reliable barometer of global economic activity, plunged 23.25%, while its competitors like UPS, XPO Logistics and Amazon lost 5.19%, 8.46% respectively. % and 3.34%.
“The Fed will see FedEx’s warning as a sign that it is on the right track and not as a wake-up call that it may have acted too aggressively,” said Rick Meckler, partner at Cherry Lane Investments.
Markets are broadly pricing in a 75bp rate hike from the Fed next Wednesday and a 100bp hike is not out of the question.
In addition to the warning from FedEx, the International Monetary Fund (IMF) and the World Bank (WB) also indicated on Thursday evening that they expect a heightened risk of an economic slowdown in the third quarter and a global recession next year, respectively.
Sign of the nervousness of investors, the CBOE index of volatility goes back up 6.24% to 27.91 points.
In the other values of the day, Uber Technologies yields 6.50% after the announcement of the opening of an internal investigation into a “cybersecurity incident”, press information making a data leak.
General Electric fell 5.16% as the group said Thursday evening that it continues to face bottlenecks in the supply chain.
(Written by Claude Chendjou, edited by Kate Entringer)