FedEx Earnings to Provide Clues on Stock Market Rally's Fate

The Dow Theory, a stock market thesis coined by Charles Dow, states that a move in the Dow Industrials must be confirmed by the Transportation Index for a true market trend to take hold. With FedEx's earnings upcoming, Wall Street is watching the transport index closely as it has struggled this year, and the Dow Theory suggests that a strong economy is linked to the performance of transportation companies. Analysts expect FedEx to report slight growth, but the stock market reaction will depend on whether the company sees a rebound coming in the holiday season.

FedEx Corp.'s earnings report, scheduled for Thursday, is set to provide crucial insights into the health of the stock market, particularly as it relates to the Dow Theory. According to this stock market thesis, coined by Charles Dow, a move in the Dow Industrials must be confirmed by the Transportation Index for a true market trend to take hold. This year, the Dow Industrials have been setting new records, while the Dow Transport Index has languished, raising concerns among analysts Old Time Dow Theory Sees Clues to Stock Market Rally in FedEx Earnings^[1].

The Dow Theory suggests that the performance of transportation companies, such as FedEx, can serve as a bellwether for the broader economy. FedEx, the second-largest weighted stock in the transport index, is expected to report slight growth in revenue and adjusted earnings per share in the first quarter of its fiscal year. However, the stock market's reaction will hinge on whether the company sees a rebound coming in the holiday season, its busiest period Old Time Dow Theory Sees Clues to Stock Market Rally in FedEx Earnings^[1].

Wall Street has soured on package delivery stocks this year due to the Trump administration's tariffs, which have dampened demand for shipments. FedEx has fallen 20% in 2025, making it one of the 50 worst-performing stocks in the S&P 500 Index. Meanwhile, United Parcel Service Inc. shares have tumbled 33% to near the lowest level since 2013 Old Time Dow Theory Sees Clues to Stock Market Rally in FedEx Earnings^[1].

Investors will be closely watching FedEx's earnings call to understand how the company plans to manage the Trump administration's decision to end the de minimis exemption, which allowed packages worth $800 or less to enter the U.S. duty-free. This policy change has already taken a toll on carriers like FedEx and UPS Old Time Dow Theory Sees Clues to Stock Market Rally in FedEx Earnings^[1].

BlackRock, the world's largest asset management company, has also indicated a "vote of confidence" in the U.S. stock market by increasing its risk exposure and expanding its exposure to the artificial intelligence (AI) sector. The company's model investment portfolios are now over-allocated by 2% in stock holdings, reflecting the strong earnings performance of U.S. companies BlackRock's $185 Billion Portfolio Rebalancing, Betting on US Stock Market Outlook and AI Trading Signals^[2].

While the Dow Theory's warning sign continues to flash, some strategists argue that it has little merit in the digital age, missing out on the significant role of vertically integrated retailers like Amazon and Walmart that handle their own shipping and delivery. Nevertheless, the Sevens Report's Tyler Richey suggests that the Dow Theory should be used in conjunction with other indicators to get a full picture of the economy Old Time Dow Theory Sees Clues to Stock Market Rally in FedEx Earnings^[1].

FedEx's earnings report has the potential to either refute or confirm the bearish trends indicated by other economic measurements, such as the Treasury yield curve steepening, credit spreads edging higher, and the ratio of the price of gold to the price of oil at its highest since 2020 Old Time Dow Theory Sees Clues to Stock Market Rally in FedEx Earnings^[1].