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NEW YORK: US stocks fell on Tuesday as a downbeat forecast from United Parcel Service fueled concerns about a slowing US economy, while a plunge in First Republic Bank’s deposits stoked worries about the banking sector.

United Parcel Service Inc shares tumbled 9.2% and appeared set for their biggest single-day drop in more than eight years after it forecast full-year revenue at the lower end of its earlier outlook as the delivery firm grapples with a weakening economy.

Peer FedEx Corp lost 2.9%, while the Dow Jones Transport Average index slumped 3.1%.

“Some of these earnings are pretty weak and the growth prospects are not looking great,” said Joe Saluzzi, co-manager of trading at Themis Trading.

“Most people expected a slowdown, but it’s a matter of how slow do we go. On the flip side you worry about what the Fed’s going to do.” Denting investor sentiment further, First Republic shares tanked 28.8% to a record low after the beleaguered lender reported a more than $100 billion flight in deposits in the first quarter following the biggest banking crisis since 2008 last month.

The KBW Regional Banking index dropped 2.2%, while the broader S&P 500 bank index shed 1.5%.

Investors have been concerned about the impact of elevated inflation and aggressive interest rate hikes by the Federal Reserve on companies’ margins.

Adding to worries, data showed US consumer confidence fell to a nine-month low in April.

General Motors Co reversed early gains to fall 2.6% after the automaker cautioned that price gains over 2022 won’t last as the year goes on, even as it lifted its full-year profit and cash flow forecasts.

“It’s apparent that the Q1 earnings season has not been able to break us out of this rangebound trading,” said Max Grinacoff, US equity and derivative strategist at BNP Paribas.

“If we do get into this well-flagged recession, we see risk that earnings continue to deteriorate and it’s hard to see the market trending higher.” PepsiCo Inc rose 2.3% after raising its annual revenue and profit forecasts, helping consumer staples stocks log gains in an otherwise weak market.

Alphabet Inc and Microsoft Corp slipped ahead of their results after markets close on Tuesday.

Three-month Treasury yields jumped while longer-duration yields fell as investors balanced worries about the US debt ceiling with rising concerns about the regional banking sector and the possibility of an imminent recession.

At 11:43 a.m. ET, the Dow Jones Industrial Average was down 143.65 points, or 0.42%, at 33,731.75, the S&P 500 was down 34.71 points, or 0.84%, at 4,102.33, and the Nasdaq Composite was down 120.92 points, or 1.00%, at 11,916.28.

Investors are awaiting the Fed’s monetary policy decision next week for hints on the path of interest rates, with traders largely expecting the central bank to hike rates by 25 basis points and hold steady before cutting them later this year.

Declining issues outnumbered advancers by a 3.97-to-1 ratio on the NYSE and a 2.61-to-1 ratio on the Nasdaq.

The S&P index recorded 21 new 52-week highs and six new lows, while the Nasdaq recorded 30 new highs and 246 new lows.

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