Wall Street dips when FedEx provides surplus forecast; all eyes on Fed By Reuters

By Medha Singh and Ambar Warrick

(Reuters) – US stocks came under pressure on Wednesday following a FedEx surplus forecast, while investors waited for a decision on interest rates and clues about the future for US Federal Reserve monetary policy.

Shares in the parcel delivery company (N 🙂 fell 1[ads1]4% and were on course for their sharpest one-day percentage decline since the financial crisis after FedEx blamed the US-China trade tensions and split with Amazon.com Inc (O 🙂 for its grim all profit forecast.

The stock was the biggest opponent of the S&P 500 () and fell 1.9% in rival shares United Parcel Service Inc (N :).

The Dow Jones transport average () lost 1.78%, while the broader industrial sector () was 0.7%. The sector was the largest customer among eight of the 11 major S&P sectors in red.

Investors are now waiting for the Fed's political statement, due at 2am. ET (1800 GMT), followed by manager Jerome Powell's address half an hour later.

The central bank is expected to lower interest rates by a quarter of a percentage point for the second time in three months, but a deep divide between policy makers has led traders to abandon all efforts for a third reduction this year.

"The market is probably seeking confirmation from the Fed that the cuts in July and probably this afternoon are not just a mid-cycle adjustment and that the FOMC is ready to take aggressive action if necessary," said Ryan Larson, head of stock trading at RBC Global Asset Management in Chicago.

Earlier in the day, the central bank injected more money into the banking system as the key policy rate exceeded its target range for the first time since the financial crisis. This puts pressure on policy makers to come up with long-term funding squeeze schemes.

In response, traders are aiming for a 25 basis point reduction in interest rates back to 72.7% after falling to nearly 50% on Tuesday, according to CME Group's FedWatch tool.

The interest-sensitive bank index <.sxpbk> slipped 0.49% and was in line with a third loss day.

Expectations of lower interest rates have spurred a Wall Street rally this year, with the benchmark S&P 500 () now about 1% below the high hit at all times in July.

At 11:25 ET, the Dow Jones Industrial Average () was down 60.42 points, or 0.22%, at 27,050.38, the S&P 500 () was down 8.17 points, or 0.27%, at 2,997.53. The Nasdaq Composite () was down 26.96 points, or 0.33%, at 8,159.06.

Adobe Inc (O 🙂 fell 2.3% after Photoshop software maker projected lukewarm revenue for the current quarter.

In a bright spot, Versace owner Capri Holdings Ltd (N 🙂 rose 2% as Jefferies raised its stock price target. Declining questions were the number of superiors for a 1.47-to-1 ratio on the NYSE and a 1.84-to-1 ratio on the Nasdaq.

The S&P index recorded 13 new 52-week highs and a new low, while the Nasdaq recorded 31 new highs and 22 new lows.