Here are the top news, trends and analysis investors need to start their trading day:
1. Nasdaq futures slide a day after the tech-heavy index fell more than 2%
Traders on the NYSE floor, May 23, 2022.
Source: New York SE
U.S. stock futures fell Wednesday, a day after the Nasdaq fell 2.4%, as Snap’s 43% slide on a profit warning dragged many other tech stocks lower. The Nasdaq bear market on Tuesday was nearly 30% off its recent high. The S&P 500 slipped 0.8%, breaking a two-day winning streak but still above bear market levels of 20% or more from a previous high. The Dow managed a small gain for its third straight positive session. But the average for the 30 stocks remained in a steep correction, defined as a 10% or more decline from its recent high.
2. Investors seek safety in bonds ahead of May Fed meeting minutes
Federal Reserve Chairman Jerome Powell speaks at a news conference following a meeting of the Federal Open Market Committee May 4, 2022 in Washington, DC. Powell announced that the Federal Reserve is raising interest rates by half a percentage point to fight record-high inflation.
Win Mcnamee | Getty Images
Bond prices have been the recipients of the sell-off in stocks lately. The 10-year Treasury yield, which moves inversely with price, fell to about 2.7% on Wednesday ahead of the release of minutes from the Federal Reserve’s May meeting. Investors are hoping to gain more insight into how the central bank thinks about inflation and the economy. Earlier this month, the Fed hiked rates by 50 basis points, double the rate in March.
3. Still elevated mortgage rates continue to reduce demand for home loans
A home for sale sign is pictured May 4, 2022 in Alhambra, California.
Frederic J. Brown | AFP | Getty Images
Even as the 10-year yield recently fell to over 3% from late-2018 highs, it’s still more than double the December low, pushing up mortgage rates and cooling demand for home loans . Homebuyer applications were flat week-over-week, down 16% from a year ago. Mortgage demand from homebuyers is now near the lows last seen in spring 2020 at the start of the Covid pandemic, just before frenzied demand has pushed prices up at an astonishing rate over the past two years. Last week, home loan refinance applications fell 2% and were 75% lower than the same week a year ago.
4. Dicks dips, Nordstrom rises after very different quarters, outlook
Cars are parked in front of a Dick’s sporting goods store in the Monroe Marketplace in Pennsylvania.
Paul Weber SOPA images | flare | Getty Images
Dick’s Sporting Goods shares fell more than 11% premarket on Wednesday, shortly after it lowered its full-year financial guidance citing sky-high inflation and ongoing supply chain challenges. Dick’s decision to lower its guidance comes after similar adjustments by Walmart, Target and Kohl’s. The sporting goods chain beat expectations for quarterly earnings and sales as shoppers splurged on golf clubs, soccer equipment and sportswear.
A shopper exits a Nordstrom store in Chicago, Illinois on May 26, 2021.
Scott Olson | Getty Images
Contrasting with other retailers’ inflation-related woes, Nordstrom is up nearly 6% in premarket trading, albeit below overnight highs. The high-end department store chain raised its full-year sales and earnings guidance after the close on Tuesday. While Nordstrom posted a slightly stronger-than-expected loss in the fiscal first quarter, it posted an 18.7% increase in sales, beating pre-pandemic levels as shoppers looked to refresh their closets with designer brands and shoes.
5. Wendy’s largest shareholder is pushing for a deal for the fast food chain
The logo of a Wendy’s restaurant is seen on July 2, 2020 in Plano, Texas.
Dan Tian | Xinhua via Getty Images
Wendy’s shares are up about 9% premarket after a report revealed late Tuesday that the fast-food chain’s largest shareholder, Trian Partners, is exploring a potential deal for the company. Founded and led by Nelson Peltz, Trian first invested in Wendy’s in 2005. The hedge fund currently owns a 19.4% stake in Wendy’s. Trian holds three board seats at the fast-food company, including one from Peltz, the chairman. Trian said it previously urged Wendy’s to cut restaurant costs, improve operations and build its brand.
— CNBC’s Peter Schacknow, Diana Olick, Lauren Thomas and Sarah Salinas contributed to this report.
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