Here are the most important news, trends and analysis that investors need to start their trading day:
1. Wall Street set to bounce after S&P 500’s worst seek since 2020
The sign for Wall Street is seen with U.S. flags 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. S&P 500 and Nasdaq futures both bounced around 1.5% to start the holiday-shortened week. The 10-year Treasury yield on Tuesday remained off 2011 highs, nearly 3.28%, a level that’s helping take pressure off stocks. Following last week’s biggest Federal Reserve interest rate hike since 1994 to fight inflation, Fed Chairman Jerome Powell is set deliver his semiannual monetary policy report to Congress on Wednesday and Thursday.
- The S&P 500‘s weekly decline of 5.8% was its worst since March 2020, the month the Covid pandemic was declared, as investors worried about a recession.
- The Dow closed under 30,000 again on Friday and lost 4.8% last week. That’s the weakest weekly performance for the 30-stock average since October 2020.
- No superlatives for the poorly performing Nasdaq‘s 4.8% weekly loss.
- All three stocks benchmarks fell for three straight weeks. The S&P 500 and the Nasdaq saw weekly losses in 10 out of the past 11 sessions, both in bear markets. The Dow’s negative week was its 11th out of the past 12, in a sharp correction.
2. U.S. oil prices recover some of last week’s sharp declines
West Texas Intermediate crude, the American oil benchmark, rose 2% on Tuesday to roughly $110 per barrel, sparking a strong premarket rally in energy stocks. However, WTI sank more than 9% last week, breaking a seven-week winning streak and settling Friday about 15% below its 13-year highs in early March of $130.50. Seesawing worries about supply and demand due to geopolitical factors including Russia’s war in Ukraine and China’s rolling Covid mitigation lockdowns and restrictions have kept oil and gasoline elevated.
3. Kellogg plans to separate; JetBlue raises its Spirit offer
Kellogg announced plans Tuesday to separate into three independent companies. The food giant will spin off its North American cereal business and plant-based division, units that accounted for about 20% of its revenue last year. The third independent company will be the remaining businesses — including its snacks, noodles, international cereal and North American frozen breakfast brands, which represented about 80% of its 2021 sales. CEO Steve Cahillane told CNBC on Tuesday it’s likely the name Kellogg will stick around in some fashion. Shares of Kellogg jumped 6% in the premarket after the announcement.
Shares of Spirit Airlines jumped 9% in Tuesday’s premarket but remained below JetBlue‘s sweetened takeover offer of $33.50 per share on Monday. Spirit said last week it was in talks with JetBlue over its offer and expected to decide on the proposal by June 30. JetBlue said its proposal represents a 68% premium to the implied value of a competing stock-and-cash bid from the parent of Frontier Airlines.
4. Musk says 3 issues need to be resolved to move Twitter buyout forward
Elon Musk said there are three main hurdles to overcome before he can complete his $44 billion purchase of Twitter. In a Bloomberg interview Tuesday, the CEO of Tesla and SpaceX said there were a number of “unresolved matters” that will need solving before he can move forward 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 walk away over questions about Twitter’s disclosures of the number of spam accounts on the platform.
5. Bitcoin swings higher after sinking below $18,000 over the weekend
Bitcoin rose more than 5% on Tuesday, back above $21,000 after a wild long weekend. The world’s biggest cryptocurrency, dropped on Saturday to as low as around $17,600, falling below the key $20,000 level for the first time since December 2020. At its low point Saturday, bitcoin was about 74% below its all-time high of more than $68,000 in November, which was the month of the Nasdaq’s last record high. Bitcoin has been trading in tandem with the tech-heavy index, shooting down the argument of crypto as an inflation hedge like gold.