The shifting economic environment could be a blow to chemical stocks, including industry leaders such as Dow , according to Citi. Analyst P.J. Juvekar downgraded Dow to neutral from buy, saying in a note to clients Friday that the Federal Reserve’s rate hikes are changing the outlook for cyclical chemical names. “These hikes are likely to lead to slower economic activity, in turn implying slower construction/housing and consumer spending. Chemical companies historically have run their plants hard as long as there was demand, but didn’t slow down quickly enough when demand faltered, leading to excess inventories (think 2001/02 and 2008/09). These stocks were down this week after the Fed move, but there could be more downside if the economy slows,” Juvekar wrote. Dow has outperformed in 2022, but the macroenvironment has changed, Citi said. “While our initial call was outperformance in high inflationary environment and rising rates, we think a slowdown in economic activity as a result will have a more negative impact on Dow,” Juvekar said. Dow cut its price target for Dow to $60 per share from $82. The new target is about 8% above where the stock closed on Thursday. — CNBC’s Michael Bloom contributed to this report.