Stocks have had a tough week, and Friday morning doesn't seem to be shaping up to give investors much relief. As of 8:30 a.m. ET, futures contracts on the Dow Jones Industrial Average (^DJI -0.17%), S&P 500 (^GSPC -0.60%), and Nasdaq Composite (^IXIC -0.92%) had fallen roughly 1%, adding to steep declines that started in earnest after Tuesday morning's unexpectedly small reduction in year-over-year consumer price inflation.

The fear that most investors have centers on the interplay between monetary policy and the strength of the economy. In particular, as the Federal Reserve looks poised to keep boosting interest rates further, the resulting impact will be a slowdown in economic activity that could cause a recession. It's in that light that investors watched the latest report from shipping specialist FedEx (FDX 0.82%) on Thursday night, and what they saw raised new worries about what the future could bring to the economy and the stock market in the months ahead.

FedEx falls on urgent warning

Shares of FedEx plunged 20% in premarket trading on Friday morning, following the release of its preliminary fiscal first-quarter financial results for the period ending Aug. 31. What the shipping giant said about the health of its business had dire implications for the broader economy.

On its face, the immediate guidance FedEx provided was mixed. The company reported a 5% to 6% in revenue to roughly $23.2 billion. However, cost pressures weighed on its bottom line, with FedEx calling for adjusted earnings of $3.44 per share, down more than 21% year over year.

Yet FedEx cast its report in a pessimistic light, citing softness in global shipping volumes that only worsened in the final weeks of the quarter. Macroeconomic weakness in the Asia-Pacific region and hiccups in service in Europe hurt the FedEx Express segment, while FedEx Ground revenue also fell well short of company forecasts.

CEO Raj Subramaniam made it clear that there was only so much FedEx could do internally to counteract the impacts of outside pressures. The company took immediate action to reduce expenses and respond to worsening macroeconomic conditions, but Subramaniam pointed to the dramatic speed at which the deterioration took place as affecting its ability to implement productivity-enhancing and cost-cutting measures.

FedEx withdrew its earnings guidance for the full 2023 fiscal year, making it clear to investors that it lacks the ability to project what macroeconomic conditions could look like just months into the future. It explicitly said it expects further weakening in its fiscal second quarter, projecting earnings that are about half what those following FedEx had expected to see prior to the report.

Should investors worry?

Many people in the investing community see FedEx as a barometer of activity in the broader economy. Especially given the boom in e-commerce over time, investors can look at FedEx's shipment volumes as a way of gleaning how much business is taking place, both between suppliers and manufacturers and between consumer-facing businesses and their customers. If FedEx is seeing poor conditions, it suggests that those using FedEx's services don't need the shipping giant as much as they pull back in a tough economic environment.

To get a more complete picture of the shipping economy, though, it'll be important to look at what other players in the industry say. If United Parcel Service indicates similar weakness, then it could confirm what FedEx said. Moreover, how Amazon performs will also be a key indicator, as it has increasingly moved toward vertically integrating its own shipping. If Amazon is doing well as UPS and FedEx suffer, it could simply mean a shifting of logistics preferences rather than a dire sign of a full-blown economic recession ahead.