Major benchmarks ended the session close to even Wednesday after the Federal Reserve lowered interest rates but gave ambiguous signals about further cuts. The Dow Jones Industrial Average (DJINDICES:^DJI) and the S&P 500 (SNPINDEX:^GSPC) were negative for most of the day but rallied near the end of the session.

Today's stock market

Index Percentage Change Point Change
Dow 0.13% 36.28
S&P 500 0.03% 1.03

Data source: Yahoo! Finance.

As for individual stocks, FedEx (NYSE:FDX) fell after a miserable earnings report, and Adobe Systems (NASDAQ:ADBE) announced strong results but light short-term guidance.

Front of the New York Stock Exchange.

Image source: Getty Image.

Trade tensions hit FedEx

Shares of FedEx had their worst day in a decade, falling 12.9% after the company reported disappointing profit in its fiscal first quarter and lowered its outlook. Revenue was flat at $17.05 billion, about what analysts were expecting, but adjusted earnings per share dropped 12% to $3.05, missing expectations of $3.16 by a mile.

Three months ago, FedEx had said it expected adjusted EPS for fiscal 2020 to fall from last year's $15.52 by mid-single digits, but yesterday it lowered that guidance to $11 to $13, a drop of 23% at the midpoint. "Our performance continues to be negatively impacted by a weakening global macro environment driven by increasing trade tensions and policy uncertainty," said Chairman and CEO Fred W. Smith.

Investors often look to FedEx's results as an indicator of where the global economy is going, and the news was not good on that front. The company said on the conference call that industrial customers are pulling back and that it expects global trade volumes to contract this year for the first time since 2009. FedEx is also struggling with company-specific challenges, as profits were hurt by the loss of Amazon's business, the integration of its TNT Express acquisition, and costs associated with expanding to six-day delivery.

Adobe continues strong growth

Subscription software vendor Adobe reported strong results in its fiscal Q3, but gave conservative guidance for next quarter, and shares slipped 1.8%. Revenue increased 24% to $2.83 billion, GAAP EPS rose 20% to $1.61, and adjusted earnings per share grew 18% to $2.05. Last quarter, the company had guided to adjusted EPS of $1.95 on revenue of $2.80 billion.

Adobe's digital media segment grew 22% to $1.96 billion, ahead of company expectations, while digital experience jumped 34% to $821 million, in line with prior guidance. Looking ahead to next quarter, Adobe expects digital media revenue growth of 20% and digital experience revenue growth to slow to 23%. The company guided to adjusted EPS of $2.25 on revenue of $2.97 billion. Analysts have been expecting EPS of $2.30 on revenue of $3.03 billion.

Adobe said on the conference call that it had a shortfall in bookings in the digital experience segment that will result in slower revenue growth next quarter, but that it expects bookings to bounce back in the coming months.