US stocks drop as FedEx's warning highlights recession concerns before the Fed's next rate hike

FedEx's dreary outlook flashed a warning on global economic health just days before the Federal Reserve is set to deliver its next interest rate hike.

The S&P 500 is on the verge of its second straight loss and is poised for a weekly decline.

FedEx dropped its earnings guidance for the year after issuing a profit warning for the first quarter. The results were hurt by global volume weakness that accelerated in the last weeks of the quarter. Raj Subramaniam told CNBC that he thinks there will be a recession.

The US indexes opened at 9:30 a.m.

Giuliano Gasparet, head of equity at Generali Insurance Asset Management, said in a note that more and more companies are warning on their profits.

After August inflation came in above expectations, Wall Street's major indexes were set to fall by more than 2% each. There was a negative impact on risky assets when the bond market suddenly reacted with higher yields. He said that there could be further weakness in the stock market.

The fed funds rate is expected to be raised by 75 basis points. Four times this year, the Fed has raised rates.

There are other things happening today.

It's in commodities.