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The Dow Jones Industrial Average closed 140 points (0.5%) lower. The S&P 500 is down 0.7% for him and the Nasdaq Composite is down 0.9% for him.

All three major indexes posted their fourth week of declines in the last five weeks. The Dow is down 4.1% this week, while the S&P 500 and Nasdaq are down 5% and 5.5% respectively.

FedEx shares fell nearly 22% after the company withdrew its full-year guidance late Thursday and warned it would fall short of its earnings target by $500 million due to a slowing economy.A weakening global economy, especially in Asia and Europe, has taken its toll fedex (FDX) (FDX) express delivery business. Demand for packages weakened significantly in the last few weeks of the quarter, according to the company.

In an interview on CNBC on Thursday, FedEx CEO Raj Subramaniam was asked if he thought the slowdown in his business was a sign of the beginning of a global recession.

“I think so,” he replied. “These numbers don’t bode well.”

This was FedEx’s worst one-day drop in history, surpassing the 16% drop on the day of the 1987 stock market crash. The Dow Transportation Index also fell more than 5% in Friday’s trading and FedEx competitors. UPS (UPS)also decreased by about 5%.

Shipping inventory is considered a leading indicator for the overall market, with FedEx in particular being seen as a market leader. The announcement could contribute to a broader selloff in a market that is already headed for a significant week of decline.

Still, some analysts think Amazon could be a headache for FedEx. “Amazon (AMZN) [recently] We launched free shipping software for sellers and discounted shipping,” JP Morgan’s Jack Atherton wrote in a customer note.

“Amazon has been funding its logistics capacity over the past few years, but it has excess capacity to serve its own needs and is desperate for more share targeted through FBA (Fulfillment By Amazon). It could be putting pressure on FedEx.”

Amazon shares fell more than 2% on Friday.

In any case, the third-quarter reporting season begins next month, and FedEx’s warnings add to analysts’ grim outlook on earnings forecasts.

Third-quarter earnings per share estimates are down more than 5.5% from the end of June, according to FactSet data. This is the biggest quarterly drop since the second quarter of 2020, when Covid-19 plunged the US into recession.

FedEx’s announcement also comes as investors fear a worsening economic outlook as the Federal Reserve aggressively hikes interest rates to keep inflation in check.

The University of Michigan’s preliminary September Consumer Confidence Index added to investor woes on Friday, hitting 59.5, its highest level since April, but below economists’ expectations. In a September survey, respondents indicated they don’t think high prices will go away anytime soon, with consumers expecting inflation to hit 4.6% in the next 12 months and 2.8% in the next five years. Expect.

This is bad news for investors. Because expectations can be self-fulfilling prophecies. If consumers expect prices to remain high, they are likely to spend more and demand higher wages, and businesses are likely to raise prices to meet higher demand and wages. There is a nature. Low expectations could restrain spending and curtail wage increases.

Friday’s consumer sentiment report is the last major economic data before the Federal Reserve meets next week to discuss monetary policy and decide whether to raise rates again in the fight to keep inflation in check. is.

Still, the biggest part of this week’s market losses came on Tuesday after the August CPI report, a key inflation indicator, heated up. The Dow fell 1,200 points on this news. This is his worst drop since June 2020.

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