5 things to know before the stock market opens on Tuesday 14 March

  • The failures of Silicon Valley Bank and Signature Bank loom over the markets.
  • The consumer price index for February will be released this morning.
  • Uber and Lyft win major court victory in California.

Here are the key news investors need to start their trading day:

Investors are looking for clarity after a few days of dramatic reversals. Monday was a mess as markets tried to figure out the ramifications of the closings of Signature Bank and Silicon Valley Bank. The Dow ended lower, marking its fifth consecutive day of losses, while the Nasdaq managed to eke out a small victory. Regional bank stocks took a big hit as government actions to contain the fallout from Silicon Valley Bank and Signature failed to reassure both investors and depositors, at least for now. First Republic, for example, fell a whopping 62 percent on Monday. Still, these shares can wait until Tuesday for an upturn. Follow live market updates.

Federal Reserve Chairman Jerome H. Powell testifies before a House Financial Services hearing on “The Federal Reserve’s Semi-Annual Monetary Policy Report” on Capitol Hill in Washington, U.S., March 8, 2023.

Kevin Lamarque | Reuters

The Federal Reserve remains on track to raise its benchmark interest rate by a quarter of a point next week, despite the second and third largest bank failures in history. As of Monday, even with market turmoil, particularly among regional banks, traders saw an 85% chance the rate hike would still happen as the central bank tries to cool inflation. However, Goldman Sachs stood out as the dissenting voice, arguing that Fed Chairman Jerome Powell and crew will hold off on a rate hike until further notice. “We believe that Fed officials are likely to prioritize financial stability for now, viewing that as the immediate issue and high inflation as a medium-term issue,” Goldman said in a note to clients. The Fed’s next policy meeting is scheduled for 21-22. March.

A shopper looks at the meat section of a supermarket in Los Angeles on February 13, 2023 in Los Angeles.

Mario Tama | Getty Images News | Getty Images

Speaking of inflation, the government’s consumer inflation report for February is due at 8:30 a.m. ET Tuesday. It is expected to come in somewhat cooler than January’s CPI, showing that the Fed continues to make some progress in its fight against price increases. This report will take on added significance given the context of the failures of Silicon Valley Bank and Signature Bank, which sparked turmoil among regional banks. As CNBC’s Patti Domm points out, before the banking upheaval, a warm CPI report might have pushed the Fed to raise interest rates by half a point next week. Now, with the stability of the financial system at the top of everyone’s mind, even a larger-than-expected reading is unlikely to push the Fed to go higher than a quarter point.

Travelers wait for an Uber rideshare vehicle at Los Angeles International Airport (LAX) on February 8, 2023 in Los Angeles, California.

Mario Tama | Getty Images

Shares in Uber, Lyft and DoorDash all jumped in after-hours trading after a California appeals court allowed such companies to treat their drivers as independent contractors and not employees. The ruling upheld a measure called Proposition 22, which California voters approved in November 2020 after a costly campaign in which ride-sharing and delivery companies spent more than $180 million. Monday’s ruling overturned a lower court’s rejection of Proposition 22, which was contested by a group of rideshare drivers. The measure exempts Uber and others from following several compensation laws.

Local residents of the village of Bohorodychne walk on a broken bridge over the Siversky Donets to collect bread from the other bank, in Bohorodychne, Donetsk Oblast, March 10, 2023, amid Russia’s military invasion of Ukraine. (Photo by ANATOLII STEPANOV / AFP) (Photo by ANATOLII STEPANOV / AFP via Getty Images)

Anatoly Stepanov | Afp | Getty Images

Authorities extended a Russian-Ukrainian grain export agreement by 60 days, Russia’s deputy foreign minister told a Russian news agency. The agreement has made it possible for Ukraine to export wheat, corn and other agricultural products through the Black Sea. A Russian blockade in the earlier stages of the war had damaged global food supplies and driven up prices. Elsewhere, Ukrainian President Volodymyr Zelenskyy defended his decision to continue defending the eastern Ukrainian city of Bakhmut. “We must destroy the enemy’s military power – and we will destroy it,” he said. Follow live war updates.

– CNBC’s Sarah Min, Jeff Cox, Patti Domm, Rohan Goswami and Holly Ellyatt contributed to this report.

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