Here are the most important news, trends and analysis that investors need to start their trading day:
1. Wall Street set to rise after S&P 500 hits lowest level in more than a year
Traders work on the floor of the New York Stock Exchange (NYSE) in New York, March 22, 2022.
Brendan McDermid | Reuters
U.S. stock futures rebounded on Tuesday as investors hoped Wall Street could snap its three-game losing streak. The S&P 500 fell Monday to its lowest level in more than a year. The broad stock index fell 3.2%, closing below 4,000. The Nasdaq fell nearly 4.3% and the Dow Jones Industrial Average fell nearly 2%. The Nasdaq bear market approached a 30% decline from its last high in November. The S&P 500 and Dow Jones have moved deeper into correction territory, defined by a decline of 10% or more from their most recent highs, which were in early January.
2. 10-year Treasury yield and US oil prices fall; bitcoin bounces
The sharp sell-off in the stock market of late was largely triggered by the rise in the 10-year Treasury yield, with bond traders betting that the Federal Reserve will not be able to bring inflation under control in a timely manner. Ahead of two key inflation reports on Wednesday and Thursday, President Joe Biden is expected to deliver remarks on inflation on Tuesday.
- Falling 10-year yields from multi-year highs did not appear to help stocks on Monday. However, the benchmark yield fell again on Tuesday, falling below 3%, and stocks rose pre-market.
- A day after falling nearly 6.1%, U.S. oil prices fell another roughly 1.5% on Tuesday, but remained above $100 a barrel. High crude prices were reflected in U.S. gas pumps — and on Tuesday the national average hit a non-inflation-adjusted record high of $4.37 a gallon, according to AAA.
- Bitcoin surged above $31,000 on Tuesday, a day after falling below that level for a decline of more than 50% from the all-time high in November. The recent price declines come amid a broader multi-day selloff that has trapped much of the crypto and equity market.
3. Peloton dives after reporting big loss and weak tips
Peloton on Tuesday reported a bigger-than-expected quarterly loss and a sharp drop in sales as inventory piled up in warehouses and ate away at the company’s cash. Shares of the connected fitness equipment maker plunged more than 20% in premarket trading. Peloton offered a weak sales outlook for the current quarter, citing weaker demand. The company predicts that the planned increases in subscription prices could cause some users to cancel their monthly subscriptions.
4. The stock of migraine drugs is skyrocketing; Covid vaccine maker shares sink
Pfizer said Tuesday it would buy migraine drug maker Biohaven Pharmaceutical for about $11.6 billion in cash. Pfizer will acquire all outstanding shares of Biohaven that it does not already own for $148.50 each in cash. That’s 78.6% higher than Biohaven’s closing price on Monday, a premium largely reflected in Tuesday’s premarket. In November, Pfizer acquired the overseas marketing rights to two migraine drugs from Biohaven for up to $1.24 billion, with Pfizer taking a 2.6% stake.
Novavax shares fell more than 20% in premarket trading after the vaccine maker missed earnings estimates for its latest quarter. The misfire comes as Novavax only shipped 31 million doses of Covid in the quarter, putting it well below the pace of its 2 billion shots projected for 2022. While reiterating its earlier revenue guidance for 2022, the company said it expects vaccine sales to accelerate in the current quarter.
5. Tesla stops production in Shanghai; Musk ‘aligned’ with EU tech legislation
Tesla has halted most production at its Shanghai factory due to issues securing parts, according to Reuters, citing an internal memo. It is the latest in a series of difficulties for the electric vehicle maker’s factory in China’s largest city, which has been experiencing various levels of lockdown for more than a month under the zero- Covid of this country.
European industry chief Thierry Breton met Elon Musk in Texas on Monday, and the two signed an agreement on European digital media regulation ahead of the Tesla CEO’s purchase of Twitter. In a video with Breton, Musk said the spirit of the Digital Services Act was “exactly aligned” with his thinking. The two did not go into detail about the law, which imposes heavy fines on platforms if they fail to police illegal content.
—CNBC MacKenzie Sigalos, Lawrence Thomas and pippa stevens as well as Reuters contributed to this report.
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