Investing.com - Financial Markets Worldwide
Get 40% Off
Get 40% Off
👀 👁 🧿 All eyes on Biogen, up +4,56% after posting earnings. Our AI picked it in March 2024.
Which stocks will surge next?
Unlock AI-picked Stocks

Wall St drops to two-month lows as recession fears mount

Published 09/16/2022, 05:11 AM
Updated 09/16/2022, 06:30 PM
© Reuters. FILE PHOTO: Raindrops hang on a sign for Wall Street outside the New York Stock Exchange in Manhattan in New York City, New York, U.S., October 26, 2020. REUTERS/Mike Segar/File Photo

(Refiles to insert dropped word "like" in quote, paragraph 4)

By Stephen Culp

NEW YORK (Reuters) -U.S. stocks ended in the red on Friday, falling to two-month lows as a warning of impending global slowdown from FedEx hastened investors' flight to safety at the conclusion of a tumultuous week.

All three major U.S. stock indexes slid to levels not touched since mid-July, with the S&P 500 closing below 3,900, a closely watched support level.

Staggering past the finish line of a week rattled by inflation concerns, looming interest rate hikes and ominous economic warning signs, the S&P 500 and the Nasdaq suffered their worst weekly percentage plunges since June.

"It’s been a tough week. It feels like Halloween came early," said David Carter, managing director at JPMorgan (NYSE:JPM) in New York. "We are facing in this toxic brew of high inflation, high interest rates and low growth, which isn’t good for stock or bond markets."

Risk-off sentiment went from simmer to boil in the wake of FedEx Corp (NYSE:FDX)'s withdrawal of its earnings forecast late Thursday, citing signs of dampening global demand.

FedEx's move followed remarks from the World Bank and the IMF, both of which warned of an impending worldwide economic slowdown.

A deluge of mixed economic data, dominated by a hotter-than-expected inflation report (CPI), cemented an interest rate hike of at least 75 basis points at the conclusion of the Fed's monetary policy meeting next week.

"While the market is expecting a big bump in the Fed’s rates next week, there is tremendous uncertainty and concern about future rate increases," Carter added. "The Fed is doing what it needs to do. And after some pain, markets and the economy will heal themselves."

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

Financial markets have priced in a 18% likelihood of a super-sized, 100 basis point increase to the Fed funds target rate on Wednesday, according to CME's FedWatch tool..

The Dow Jones Industrial Average fell 139.4 points, or 0.45%, to 30,822.42, the S&P 500 lost 28.02 points, or 0.72%, to 3,873.33 and the Nasdaq Composite dropped 103.95 points, or 0.9%, to 11,448.40.

Nine of the 11 major sectors of the S&P 500 ended in negative territory, with energy and industrials suffering the sharpest percentage drops.

Dow Transports, viewed as a barometer of economic health, plummeted 5.1%.

That drop was led by FedEx shares tanking by 21.4%, the biggest drop in the S&P 500.

Peers United Parcel Service (NYSE:UPS) and XPO Logistics (NYSE:XPO) slid 4.5% and 4.7%, respectively, while Amazon.com Inc (NASDAQ:AMZN) slipped 2.1%.

The session also marked the monthly options expiry, which occurs on the third Friday of every month. Options-hedging activity has amplified market moves this year, contributing to heightened volatility.

The CBOE Market Volatility index, often called "the fear index," touched a two-month high, breezing past a level associated with heightened investor anxiety.

Declining issues outnumbered advancing ones on the NYSE by a 3.04-to-1 ratio; on Nasdaq, a 2.24-to-1 ratio favored decliners.

The S&P 500 posted no new 52-week highs and 56 new lows; the Nasdaq Composite recorded 21 new highs and 387 new lows.

Volume on U.S. exchanges was 16.92 billion shares, compared with the 10.72 billion average for the full session over the last 20 trading days.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

Latest comments

congress should enact banning any interest hiking by Fed during a war US is engaging for national security like ukraine war. the sooner enacted, the better. when nation's survival is at stake, trivial things like interest rates don't matter. the nation should survive first. key thing here is raising interest rates now will help the enemy.
This administration does not care about our nation. They want to destroy it
  That's not what the Kremlin is saying
Tell me how much your picks are down Kerry
Next week will be even worse because of the FED decision.
Natural gas, -6% today is a very bullish sign. Hope Ukraine war gets over with peace for humanity.
liquidity glut for humanity
liquidity glut is beautiful gift for humanity
glut of liquidity exists. massive liquidity inflows to us from other countries add the glut. glut is good
early morning trade magic down show ended, now reverse upside action kicked in
And the "late trade" magic show begins, right on schedule.  The greatest financial fraud in the world on full display.  What's next, another green-across-the-board miracle?  Criminally manipulated JOKE.
it's all about leverage trading nowadays. no one gives a damn about fundamentals and economy 😅
Your comments always get my thumbs up. I'm your biggest groupie. I'm also sure you're secretly some legend like Michael Burry or Warren Buffet based on your market analysis.
Thanks J2 (Biden & Manchin) for stoking inflation even further with the Hyperinflation Act of 2022! Just wait until that kicks in next year after the elections…. Hmmmm
Bulls are just Emotionally bullish... Rationality has been thrown out of the window... this is the Bitter truth....
Feel sorry for the Bulls!! read this... Just Copy pasting an observation... Todd Lowenstein, chief equity strategist of the Private Bank at Union Bank says......"The market is in a sort of tug of war for the most part. On one hand you have these rapidly deteriorating fundamentals, on the other hand there was this what I call a misplaced hope for sort of a resurrection of the Fed pivot. The market is increasingly coming to terms that the Fed is not going to be there to save the day."
Relax , the winter is comming ! Things is gonna be worse, very worse. Be prepared. Go brandon
We're in a recession! 2 consecutive quarters of declining GDP GROWTH!!! how are you writing this and not understanding? 6 months is a Depression!!! We're heading into that!
Show me a source defining "2 consecutive quarters of declining GDP GROWTH" as a recession
Let's settle who has dementia!
As of June 30, the whole year GDP from last year is higher by 1.6%. This '' recession'' I technical .because the economy.is producing jobs and unemployment is super low because inflation is super high and people. are jumping from a job to a job to make ends meet. Meanwhile the Misery Index is right at the limit of 12.
The criminally initiated floor remains in place as a stop-gap to further losses.  Yet another major downturn is averted.  This farce of a market can "rally" 500+ points without stress, on nothing, yet miraculously it struggles to lose 300 at these fraudulently inflated levels even after a spate of poor data.  No wonder the global investment community considers the US market a laughingstock.  Talk about the crime of the century.
of course the feds have a leg in this setup, they want to attract the money abroad investors , they will believe the bottom is in and easy up than down from here
Updated TA 9/16/22
After years of "Orange Man Bad" daily as markets went up, they absolutely refuse to mention Brandon in any of these articles about the economy. Despite trillions in spending and 40+ year record high inflation and low unemployment, we have decreased factory output, declining GDP, and the stock market has given up all gains since Brandon took office. There is a reason that socialism ends in breadlines and gulags. And Putin is out there exposing just how fragile the "New World Order" is. China and India out there pumping out record levels of pollution, meanwhile the US has wasted trillions on "green energy" just for the East to now collapse our energy market because "green" energy is nothing but a scam. They are burning coal to charge your electric cars.
We are in uncharted territory.
If you are younger than 14.
Bidem's speech is the same as that of communist leaders in Latin America, they want to silence conservative voices. The media is against conservatives and they want to destroy the family and force gender ideology down our throats. They invent the discourse of racism, xenophobia, homophobia, etc, etc...... Everything is part of the communists' plan to end family values. I bet all these school killings were financed by these groups to later say that the best way is to disarm the population. Don't fall for this lie, in Latin America the first thing the communists did when they came to power with communist president "Lula" was to disarm the Brazilian people. Thus, the people have no way to defend themselves and become hostage to armed bandits in the streets. Look for "Foro de São Paulo", the biggest communist movement in latin america. Created by "Lula" and Fidel Castro, to expand communist rule in south america. search
Q called, he wants his tin foil hat back.
 Got upset? hahahaha
Fewer US companies are being created than are being closed.... again...just like during Obama's administration.
You sure about that? https://www.federalreserve.gov/econres/notes/feds-notes/business-entry-and-exit-in-the-covid-19-pandemic-a-preliminary-look-at-official-data-20220506.html
US is practically in ukraine war against Russia. during a war, central bank is not supposed to raise interest rate. raising the rate helps the enemy. raising the rate now is like not funding for covid vaccines during the pandemic war.
a. n noo
It's time to form your own party in the same vein like the Donald.
Can't follow your logic here. Maybe it makes sense in some strange parallel existence...
Have a nice weekend !!
Let's continue to undue the Trump Fiasco.
The down voters want to redo the Trump fiasco?
oh yeah fedex is a great indicator watch bonds. biden is on a roll love tge inflation speach. my god what planet is harris, Pelosi and biden on. twighlight zone
Biden the president who puts the USA on the same level as Venezuela. lol
Lets Go Brandon
Install Our App
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.