Here are the most important news, trends and analysis that investors need to start their trading day:
1. Wall Street is set to rebound after the S&P 500’s worst run since 2020.
A Wall Street sign with US flags is visible outside the New York Stock Exchange.
Yuki Iwamura | Afp | Getty Images
Dow futures jumped 400 points, or 1.4%, on Tuesday after a terrible week of selling. Futures for the S&P 500 and Nasdaq jumped about 1.5% at the start of the holiday-shortened week. The 10-year Treasury yield remained below its 2011 high at nearly 3.28% on Tuesday, a level that is helping ease pressure on stocks. Following the Federal Reserve’s biggest rate hike last week since 1994 to fight inflation, Fed Chairman Jerome Powell will present his semi-annual monetary policy report to Congress on Wednesday and Thursday.
- The S&P 500’s 5.8% weekly decline was the worst since March 2020, when Covid was declared a pandemic, as investors feared a recession.
- The Dow Jones closed below 30,000 again on Friday and lost 4.8% last week. This is the weakest weekly performance for a 30-stock average since October 2020.
- No superlatives for a poorly performing Nasdaq with a 4.8% weekly loss.
- All three stock benchmarks fell for three consecutive weeks. The S&P 500 and Nasdaq have posted weekly losses in 10 of the last 11 sessions, both in bear markets. The negative week of the Dow was the 11th of the last 12 in a sharp correction.
2. Oil prices in the US have partially recovered from last week’s sharp drop.
West Texas Intermediate, the US oil benchmark, rose 2% on Tuesday to around $110 a barrel, sparking a strong pre-market rally in energy stocks. However, WTI fell more than 9% last week, snapping a seven-week winning streak and dropping about 15% on Friday from its 13-year early March high of $130.50. Fluctuating supply and demand concerns due to geopolitical factors, including Russia’s war in Ukraine and China’s ongoing lockdowns and restrictions to mitigate the effects of Covid, are propping up oil and gasoline prices.
- But as of Tuesday, the national average per gallon of gasoline dropped below $5. That said, it’s still a lot, and President Joe Biden said on Monday he’s seriously considering a temporary suspension of the federal gas tax until July Fourth.
3. Kellogg plans to spin off; JetBlue increases Spirit offer
On Tuesday, Kellogg announced plans to split into three independent companies. The food giant will spin off its North American cereals business and horticulture division, which accounted for about 20% of its revenue last year. The third independent company will be the remaining businesses, including its snacks, noodles, international cereals and North American frozen breakfast brands, which accounted for about 80% of its sales in 2021. CEO Steve Cahillane told CNBC on Tuesday that it’s likely the Kellogg name will stick around somehow. Shares of Kellogg jumped 6% in premarket trading after the announcement.
Shares of Spirit Airlines jumped 9% in premarket trading on Tuesday but remained below JetBlue’s sweetened takeover bid of $33.50 a share on Monday. Last week, Spirit said it was in talks with JetBlue about its proposal and is expected to make a decision on the proposal by June 30th. Frontier Airlines.
4. Musk says 3 issues need to be addressed to advance the Twitter buyout
Elon Musk has said he needs to overcome three major hurdles before he can complete the $44 billion Twitter purchase. In an interview with Bloomberg on Tuesday, the CEO of Tesla and SpaceX said there are a number of “outstanding issues” that need to be resolved before he can proceed with the takeover: fake accounts, debt financing and Twitter shareholder approval. The fate of the deal has become more uncertain in recent weeks after Musk threatened to quit over questions about Twitter’s disclosure of the number of spam accounts on the platform.
5. Bitcoin rises after dropping below $18,000 over the weekend.
Bitcoin is up more than 5% on Tuesday, bouncing back above $21,000 after wild long weekend. The world’s largest cryptocurrency fell to around $17,600 on Saturday, falling below the key $20,000 level for the first time since December 2020. Bitcoin was about 74% below its all-time high of over $68,000 on Saturday. in November, which was the month of the Nasdaq’s last all-time high. Bitcoin is trading in tandem with the high-tech index, refuting the argument of cryptocurrencies as an inflation hedge, like gold.
— CNBC Yoon Lee, Peter Shaknow, Samantha Subin, Jessie Pound, Amelia Lucas as well as Ryan Brown and NBC News and Reuters contributed to this report.
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