Wall Street edges lower as FedEx profit warning drags; Fed in focus

(Reuters) – 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 (FDX.N) tumbled 13% 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 (AMZN.O) for its dismal full-year profit forecast.

The stock was the biggest drag on the S&P 500 .SPX index and drove a 1.4% drop in shares of rival United Parcel Service Inc (UPS.N). The broader industrial sector .SPLRCI was off 0.57%.

Investors will also focus on the Fed’s policy statement, which is due at 2:00 p.m. ET (1800 GMT), followed by Chair Jerome Powell’s address a half hour later.

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 .SXPBK slipped 0.35% 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 .SPX now about 1% 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.

At 9:50 a.m. ET, the Dow Jones Industrial Average .DJI was down 58.42 points, or 0.22%, at 27,052.38, the S&P 500 .SPX was down 9.10 points, or 0.30%, at 2,996.60. The Nasdaq Composite .IXIC was down 25.38 points, or 0.31%, at 8,160.64.

Ten of the 11 major S&P sectors were lower, with only utilities .SPLRCU moving marginally higher.

Adobe Inc (ADBE.O) fell 4.5% after the Photoshop software maker forecast tepid revenue for the current quarter.

Declining issues outnumbered advancers for a 1.41-to-1 ratio on the NYSE and a 1.42-to-1 ratio on the Nasdaq.

The S&P index recorded six new 52-week highs and one new low, while the Nasdaq recorded 19 new highs and 12 new lows.