U.S. stocks came under pressure on Wednesday after FedEx issued a profit warning, while investors waited for the Federal Reserve’s decision on interest rates in what has been a rocky week for global markets.
Shares of the package delivery company tumbled 13 per cent and were on course for their sharpest one-day percentage drop since the financial crisis after the company blamed U.S.-China trade tensions and its split with Amazon.com Inc for its dismal full-year profit forecast.
According to Reuters, the stock was the biggest drag on the S&P 500 index and drove a 1.4 per cent drop in shares of rival United Parcel Service Inc. The broader industrial sector was off 0.57 per cent.
The central bank is expected to lower interest rates by a quarter percentage point for the second time in three months, but a deep divide among policymakers has seen traders abandon all bets on a third reduction this year.
“The focus is going to be on the policy statement, specifically, whether or not he gives any indication if this is a shift in policy or another mid-cycle rate cut,” said Robert Pavlik, chief investment strategist and senior portfolio manager at SlateStone Wealth LLC in New York.
Shares of interest-rate sensitive banking index slipped 0.35 per cent and were on pace for a third day of losses.
Expectations of lower rates have spurred a Wall Street rally this year, with the benchmark S&P 500 now about 1 per cent below its all-time high hit in July.
Equity markets took a hit on Monday after attacks on Saudi Arabia’s largest oil refinery sparked concerns about a supply shortage, leading to a spike in oil prices. However, a reassurance by Saudi Arabia that it would quickly to restore full production calmed investor nerves.
ET, the Dow Jones Industrial Average was down 58.42 points, or 0.22 per cent, at 27,052.38, the S&P 500 was down 9.10 points, or 0.30 per cent, at 2,996.60. The Nasdaq Composite was down 25.38 points, or 0.31 per cent, at 8,160.64.