5 things to know before the stock market opens on Monday 9 May

Here are the most important news, trends and analysis that investors need to start their trading day:

1. Nasdaq futures fall more than 2% as stocks continue to sell

Traders on the floor of the NYSE, May 6, 2022.

Source: NYSE

The Nasdaq thing in the balance bring Wall Street to the downside again on Monday, with futures linked to the tech-heavy index down 2%. Rising bond yields continued to put pressure on stocks as traders kept their revolt against the Federal Reserve, doubting it could keep inflation in check. Two key inflation reports were released Wednesday and Thursday. Futures trading indicated a decline of 400 points, or 1.3%, at the open for the Industrial average of the Dow Jones and a drop of 1.7% for the S&P 500.

  • The first trading week of May marked the sixth consecutive weekly decline for the Dow and five consecutive weekly declines for the S&P 500 and the Nasdaq. The Dow and the S&P 500 remained in correction, as defined by a drop of 10% or more from their recent highs. The Nasdaq tumbled further into a bear market, characterized by a drop of 20% or more from its most recent high.

2. Bond yields push higher with traders doubting the Fed on inflation

  • After the central bank hiked interest rates, as expected, by 50 basis points on Wednesday, President Jerome Powell pulled a more aggressive 75 basis point hike off the table for upcoming meetings. He also said he expects rate hikes of 50 basis points at Fed meetings in June and July.
  • Last Wednesday’s rally of relief in equities, accompanied by a decline in bond yields, was short-lived. Thursday’s whip saw was blown away and then a bit of the advance of stocks from the previous session as bond yields soared.
  • That dynamic continued on Friday and Monday’s premarket. The Fed raised rates by 25 basis points in March and is expected to rise at least as much in September, November and December meetings.

3. Bitcoin drops below $ 33,000, still tied to tech stocks

Bitcoin plunged over the weekend and fell another 5% on Monday, dropping below $ 33,000 as the world’s largest cryptocurrency remained correlated with tech stocks and the Nasdaq.

  • The pattern of recent times goes against the argument of bitcoin as a hedge against inflation. But to be fair, gold, which has long been an investment to hedge against inflation, has also suffered in the recent rough patch on Wall Street.
  • Bitcoin is down 50% from its all-time high of more than $ 68,000 in November, involved in this year’s reduction in risk assets due to rising inflation and tighter Fed policy, as well as Russia’s war. in Ukraine. Bitcoin has seen many boom and bust cycles over the years.

4. Oil slips but prices remain high in a tug-of-war between supply and demand

In 2020, the Permian Basin plants, when US crude oil production fell by 3 million a day due to cuts forced by Wall Street pressure.

Paul Ratje | Afp | Getty Images

Oil prices in the United States have fallen On Monday, along with stocks, weighed down by a strong dollar and demand concerns as the Covid blockades continued in China, the world’s largest oil importer. Demand concerns appear to have been winning earlier in the week after supply concerns over the proposed European ban on Russian oil prompted last week’s nearly 5% increase in crude oil prices, their second. consecutive weekly increase. That’s why Monday’s roughly 2.5% drop only pushes West Texas intermediate crude, the American benchmark, to around $ 107 a barrel.

5. Putin tries to defend the Russian war in Ukraine in his “Victory Day” speech.

Russian President Vladimir Putin and Defense Minister Sergei Shoigu walk after a military parade on Victory Day, marking the 77th anniversary of the victory over Nazi Germany in World War II, at Red Square in central Moscow, Russia, May 9. 2022.

Maxim Shemetov | Reuters

Russian President Vladimir Putin on Monday tried to defend Moscow’s unprovoked invasion of Ukraine in a speech on “Victory Day”, annual celebrations that mark the Soviet Union’s victory over Nazi Germany. Putin urged his forces to succeed in Ukraine, saying there is a duty to remember those who prevailed in World War II Putin repeatedly referred to the Donbas region in eastern Ukraine during the speech, appearing to double the new. Russia’s strategy to focus on the “liberation” of Donetsk and Luhansk.

– CNBC Samantha Subin, Jesse Pound, Vicky McKeever Other Holly Ellyatt as well as Reuters contributed to this report.

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