Old Time Dow Theory Sees Clues to Stock Market Rally in FedEx Earnings

Core Insights - FedEx's upcoming earnings report is anticipated to provide insights into the sustainability of the recent stock market rally, particularly in relation to the Dow Theory [1][4] - The Dow Theory suggests that a genuine market trend requires confirmation between the industrials and transportation indices, which has not occurred this year, raising concerns about market stability [2][3] Company Performance - FedEx has experienced a significant decline of 20% in 2025, ranking among the 50 worst-performing stocks in the S&P 500 Index, while UPS shares have dropped 33%, nearing their lowest levels since 2013 [6] - Analysts predict slight growth in FedEx's revenue and adjusted earnings per share for the first quarter of its fiscal year, but the market's reaction will depend on the company's outlook for the holiday season [8] Market Context - The S&P 500 has increased by 12% this year, while the Dow has risen by 8%, contrasting with a 2.5% decline in the Dow Transport Index, indicating a divergence in market performance [7] - The transportation sector, including companies like FedEx and UPS, is viewed as a critical indicator of economic health, with their struggles potentially signaling broader market issues [4][5]