5 things to know before the stock market opens on Friday, February 18
Here are the most important news, trends and analysis that investors need to start their trading day:
1. Wall Street looks unchanged after the worst day of the year for the Dow.
Traders on the NYSE floor, February 17, 2022
Source: New York Stock Exchange.
U.S. stock futures were virtually unchanged on Friday, a day after the Dow Jones Industrial Average posted its worst session of the year, falling 622 points, or 1.8%. The S&P 500 and Nasdaq fell 2.1% and 2.9% respectively on Thursday. The sell-off in equities on fears over the Russian-Ukrainian situation brought the S&P 500 closer to the correction zone, not down 10% or more from January’s record highs. The Nasdaq continued its correction, down about 15% from its November highs. The Dow is down about 7% from its January highs. All three stock indices declined in the week leading up to Friday’s open.
2. Investors worried about the Russian-Ukrainian crisis are investing in bonds
Growing tensions between Russia and Ukraine left investors confused as it dumped risky assets and switched to seemingly safe bonds on Thursday and Friday. The 10-year Treasury yield, which varies inversely with price, continued to decline to around 1.94%. Watching geopolitical events, traders remain concerned about rising inflation and how the Federal Reserve plans to deal with it. Louis Fed President James Bullard warned that inflation could become an even bigger problem without interest rate hikes. Bullard called for a full interest rate hike by July.
3. Russia announces nuclear exercises as US warns of Ukraine invasion
Russian President Vladimir Putin holds a meeting with members of the Security Council via video link at the state residence Novo-Ogaryovo near Moscow, Russia February 18, 2022.
Mikhail Klimentiev | Satellite | via Reuters
Moscow announced a massive exercise of its nuclear forces on Friday amid rising East-West tensions, with the US issuing some of the sharpest and most detailed warnings about how a Russian invasion of Ukraine could develop. A day earlier, President Joe Biden’s voice sounded unusually grim when he warned that Washington was not seeing signs of a promised Russian troop withdrawal, but instead was seeing an increase in troop concentrations. The US has warned that Russia could use false claims, including allegations of a conflict in eastern Ukraine, as a pretext to invade. Meanwhile, the Ukrainian government and Russian state media traded new allegations of violating the ceasefire.
4. Chamath Palihapitiya, who launched Virgin Galactic, leaves the board of directors
Olivia Michael | CNBC
Virgin Galactic said on Friday that venture capitalist Chamath Palihapitiya would have retired from his roles as chairman and board member of the space company to focus on other corporate commitments. Last year, Palihapitiya confirmed that he had freed up some capital by selling shares in Virgin Galactic. Shares of Virgin Galactic rose slightly in premarket trading but closed down 10% in the previous session. The stock, which Palihapitiya helped list more than two years ago in a SPAC deal, has fallen about 80% in the past 12 months. Richard Branson’s Virgin Galactic fell to nearly $7 a share a few months after its debut and surged to $62.80 in February 2021.
5. Movers: Roku, Shake Shack Crash After Posting Weaker Predictions
Remote Roku Inc. in an arranged photo in Hastings-on-Hudson, New York on May 2, 2021.
Tiffany Hagler-Greer | Bloomberg | Getty Images
Roku shares fell more than 25% in premarket trading on Friday, the morning after the video streaming device maker found quarterly revenue fell short of forecasts. It also issued a weaker-than-expected outlook, citing higher component prices and supply chain disruptions. Shares have already fallen 68% over the past 12 months. Roku got an early boost from the pandemic with people stuck at home. But as Covid restrictions have eased, so has the demand for streaming.
A masked man outside the Shake Shack innovative kitchen in Greenwich Village as the city continues Phase 4 of its reopening following restrictions put in place to slow the spread of the coronavirus September 27, 2020 in New York City.
Noam Galai | Getty Images
Shares of Shake Shack tumbled about 15% in premarket trading after the burger chain forecast current-quarter revenue below estimates as the rapidly spreading variant of Covid omicron scared away patrons and led to temporary restaurant closures. Shake Shack said after Thursday’s call that sales for the just-completed quarter were in line with estimates and the loss per share was smaller than expected.
— The Associated Press and Reuters contributed to this report. Login Now for CNBC investment club Follow every move in Jim Cramer’s stock. Follow the wider market action like a pro on CNNBC Pro.