Here are the key news, trends and analyzes that investors need to start their trading day:
1. Wall Street will open lower as bond yields remain high
Traders work on the floor of the NYSE, June 6, 2022.
US stock futures fell on Tuesday, with higher bond yields spoiling again. Sentiment also hit stocks in Target, which fell more than 8% in the advance market on a profit warning.
- The Dow Jones Industrial Average gave up almost all of Monday̵[ads1]7;s more than 300-point rise at the end, as the benchmark yield on 10-year government bonds peaked at 3%, reaching its highest level in almost a month.
- The S&P 500 and Nasdaq were able to hold on to more of their Monday gains than the Dow, ending 0.3% and 0.4% higher, respectively.
- Despite strong gains in the week before Memorial Day, last week’s losses kept the Dow and S&P 500 stuck in corrections and the Nasdaq in a bear market, based on declines from their previous records.
2. Target shares fall after the dealer warns of earnings
A person walks into a Target store in Washington, DC, May 18, 2022.
Stefani Reynolds | AFP | Getty pictures
Target warned on Tuesday that earnings will be short-lived as the retailer marks down unwanted items, cancels orders and takes aggressive steps to get rid of extra inventory. Target expects the operating margin for the second quarter of the financial year to be around 2%. It is lower than the outlook it was less than three weeks ago when it reported a major financial loss in the first quarter, sending the stock down about 25% in its worst one-day development on Wall Street since 1987.
Kohl’s jumps after entering into sales negotiations with Vitamin Shoppe owner
The Kohls logo appears on the outside of a Kohls store on January 24, 2022 in San Rafael, California.
Justin Sullivan | Getty pictures
Kohl’s shares rose nearly 10% in Tuesday’s advance market, the morning after the department store chain said it was entering into exclusive sales negotiations with the retailer behind The Vitamin Shoppe and Pet Supplies Plus. Franchise Group proposes to buy Kohl’s for $ 60 per share, a more than 40% premium until the end of Monday. The franchise group is working with Oak Street Real Estate Capital to finance the deal primarily through real estate, according to a person familiar with the matter.
Yellen starts two days with Capitol Hill testimony on inflation
Janet Yellen, US Secretary of the Treasury, will give the “Tommaso Padoa Schioppa” lecture at the Brussels Economic Forum in Brussels, Belgium, on Tuesday 17 May 2022.
Valeria Mongelli | Bloomberg | Getty pictures
Ahead of Friday’s reading of consumer prices in May, inflation is at the center of Capitol Hill this week, as Finance Minister Janet Yellen testified before a Senate panel on Tuesday and a House panel on Wednesday. Yellen, a former central bank governor, is facing tough questions about how the Biden administration has handled the economy after she was wrong that inflation was temporary. Forty years of high inflation have pushed the national average for a gallon of gas to a new record, just 8 cents at $ 5, according to AAA.
5. Senators introduce a two-part bill to regulate crypto
The US Capitol Building in Washington, DC
Liu Jie | Xinhua News Agency | Getty Images
Sens. Kirsten Gillibrand, DN.Y., and Cynthia Lummis, R-Wyo., Unveiled a bill for two parties on Tuesday to create a regulatory framework around crypto. The Lummis-Gillibrand bill, a product of months of Capitol Hill collaboration, is equivalent to classifying the vast majority of digital assets that last. The Responsible Financial Innovation Act will authorize the Commodity Futures Trading Commission to regulate most existing digital assets. Both Lummis and Gillibrand want to work to develop their respective states into blockchain and crypto paradises.
– CNBC Tanaya Macheel, Melissa Repko, Lauren Thomas and Thomas Franck as well as Reuters contributed to this report.
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