US equities fell sharply as trading opened Friday, as more recession warnings and a dire statement from FedEx added to an already downbeat week.
The earnings warning from the global shipping company was a drag on the broader market as it undermines the view the economy could see a soft landing, said Briefing.com analyst Patrick J. O’Hare.
“FedEx delivered its own earnings warning, but it also delivered a warning about macroeconomic conditions that has continued to shake the faith of investors, who have been shaken up this week by nettlesome inflation data and ruminations about rate hikes leading to a hard landing,” he said.
The company said it is closing stores, freezing hiring and parking aircraft, while warning of a big earnings hit. New CEO Raj Subramaniam said on CNBC that he expects a global recession.
The World Bank on Thursday warned that the risk of a global recession is rising, as central banks engage in synchronous interest rate increases to try to cool red-hot inflation.
Investors are poised for another steep rate hike from the Federal Reserve next week, of at least three-quarters of a percent, although some economists have raised the possibility of an even more aggressive step.
About 20 minutes into the final trading session of what was on track to be another losing week, the Dow Jones Industrial Average was down 1.0 percent to 30,639.04.
The broad-based S&P 500 had lost 1.3 percent to 3,849.76, while the tech-rich Nasdaq Composite Index sank 1.8 percent to 11,350.59.
