(Bloomberg) -- FedEx Corp. tumbled the most in two years after warning that its business would slow in the year ahead, an ominous sign about the direction of the US economy.

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The parcel giant was hurt by a pullback on priority services as customers traded down to cheaper shipping options in what Chief Executive Officer Raj Subramaniam called “a challenging quarter.” A broad effort to slash costs gained traction but only partially blunted those headwinds, the Memphis-based company said late Thursday.

FedEx’s shares slid 15% Friday in New York, the biggest decline since September 2022. Rival United Parcel Service Inc. fell 3.4%.

The results spooked investors looking for signals about where the economy is headed after the Federal Reserve this week cut its benchmark interest rate for the first time since 2020. The policy shift reflects growing concern about the health of the labor market as job gains have slowed and inflation cools.

A number of equity analysts cut their stock-price targets for FedEx in the wake of its report, including those at JPMorgan, Susquehanna and Stifel. Morgan Stanley’s Ravi Shanker, who cut both the price target and rating, said in a note that the courier’s risks may be structural rather than cyclical, suggesting they might not “go away soon.”

FedEx saw increasingly price-sensitive customers downgrading to slower and cheaper shipping options during its latest quarter, a trend that also hit UPS earlier this year. US domestic shipping volumes fell 3% at FedEx’s Express segment due to weaker business-to-business demand, Chief Customer Officer Brie Carere said on the company’s earnings call.

Expectations for higher revenue and profits from premium services in the US also failed to materialize, Chief Financial Officer John Dietrich said on the call.

“The sense of urgency isn’t there” to pay extra for ultra-fast shipping, said Bloomberg Intelligence analyst Lee Klaskow. “That usually happens when things are kind of tough, when people are trying to save money.”

FedEx now expects adjusted full-year earnings of $20 to $21 a share in the current fiscal year, below its previous forecast for as much as $22 a share. The midpoint of the new range is roughly in line with the $20.53 average of analyst estimates compiled by Bloomberg.