The New York Stock Exchange ended lower Friday at its lowest level in two months, spooked by the FedEx earnings warning and the prospect of a series of further sharp interest rate hikes that cast doubts on the ability of the US economy to land softly.
The Dow Jones lost 0.45%, to 30,822.43 points, the Nasdaq index fell 0.90%, to 11,448.40 points, and the S&P 500 index dropped 0.72%, to 3,873.33 points.
Since its summer peak in mid-August, the S&P 500 has lost almost 11% and is down 19% since the start of the year.
“Markets remain jittery,” Schwab analysts said in a note, a state “which has been exacerbated by the dire picture painted by FedEx.”
The courier group published Thursday, after the stock market and in advance, results below expectations. The title FedEx was cut, losing 21.39% in one session, to 161.04 dollars.
Managing Director Raj Subramaniam spoke of a deterioration in the macroeconomic environment at the end of the accounting quarter, which ended at the end of August. “We are seeing a drop in volumes in all segments, worldwide,” said the manager, in an interview with CNBC.
He said he expects the global economy to soon go through a recession. Given the uncertainty about the economic situation, the group withdrew its annual forecasts.
“FedEx’s warning was a major factor today,” said Tom Cahill of Ventura Wealth Management.
For him, it adds to a series of lackluster macroeconomic indicators, including retail sales on Thursday, which fell 0.3% over one month excluding sales of cars and spare parts.
“The data trend is going in the wrong direction,” says Tom Cahill. “It looks like consumers are starting to ease off” on their spending.
Consumption weighs more than two-thirds of the American gross domestic product (GDP), a proportion considerably higher than in all the other major developed countries.
The mood of the day was not improved by the consumer confidence index, published by the University of Michigan, which was up from August, but disappointed analysts.
Wall Street is watching with anxiety the rise in bond yields, which picked up speed this week with the recalibration of operators’ expectations for monetary policy, convinced that the American central bank (Fed) will hit even harder than expected.
The yield on 10-year US government bonds tightened slightly, at 3.45%, against 3.44% the day before.
Built on a model of sustained growth, technology companies are very sensitive to financing conditions, which have tightened markedly with the increase in the Fed’s key rates.
Several of the tech flagships fell to their lowest level of the year on Friday, such as Alphabet (-0.26%) or Meta (-2.18%), which had not seen these valuation levels since the start of the coronavirus pandemic.
On the other hand, so-called defensive stocks, i.e. less sensitive to the economic situation, held their own, in particular the cable 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 dollars) after the group reported a “cybersecurity incident”. According to the New York Times, an 18-year-old hacker infiltrated the internal network of the vehicle reservation platform and gained access to source code and emails, among other things.
The setbacks of its competitor in the market for cars with driver (VTC) also penalized Lyft (-4.24%).
Similarly, UPS was associated with the fall of FedEx and fell 4.48% to $176.71.
General Electric suffered (-3.66% to 66.39 dollars) from statements by its chief financial officer, Carolina Dybeck, who indicated that the conglomerate continued to suffer from supply and supply chain problems, which could limit the group benefits.
The action of the photo agency Getty Images collapsed (-36.40% to 8.49 dollars) after the publication of a document prior to a capital increase with the market regulatory authority, the SEC.