Here are the top news, trends and analysis that investors need to start their trading day:
1. Wall Street prepares to open lower as bond yields remain high
Traders work on the floor of the New York Stock Exchange, June 6, 2022.
US stock futures fell on Tuesday, as high bond yields played the spoiler once again. Sentiment was also hurt by Target shares, which fell more than 8% in the pre-market in an earnings warning.
- The Dow Jones Industrial Average gave up all of Monday’s nearly 300-plus point gains at the close as the benchmark 10-year Treasury yield topped 3%, hitting its highest level in nearly a month.
- The S&P 500 and Nasdaq managed to maintain more gains on Monday than the Dow, ending 0.3% and 0.4% higher, respectively.
- Despite strong gains in the week leading up to Memorial Day, last week’s losses kept the Dow and S&P 500 in steady corrections and the Nasdaq in a bear market, building on declines from previous all-time highs.
2. Target stocks sink after the retailer warns of profits
A person walks past a Target store in Washington, D.C., on May 18, 2022.
Stephanie Reynolds | AFP | Getty Images
Target warned Tuesday that profits will take a short-term hit as the retailer notes unwanted items, cancels orders and takes aggressive steps to get rid of extra inventory. Target expects operating margin rate for the second quarter of the fiscal year to be around 2%. That’s below expectations it gave less than three weeks ago when it reported a bigger loss in fiscal first-quarter earnings, sending the stock down nearly 25% in its worst one-day performance on Wall Street since 1987.
3. Kohl’s Jumps After Entering Sale Talks With Vitamin Shoppe’s Owner
The Kohl logo is displayed on the outside of Kohl’s store on January 24, 2022 in San Rafael, California.
Justin Sullivan | Getty Images
Kohl’s shares rose nearly 10% on Tuesday, the next morning after the supermarket chain said it had entered into exclusive sale negotiations with the retail holding company behind The Vitamin Shoppe and Pet Supplies Plus. Franchise Group is proposing to buy Kohl’s for $60 per share, more than a 40% premium to Monday’s close. Franchise Group is working with Oak Street Real Estate Capital to fund the deal mostly through real estate, according to a person familiar with the matter.
4. Yellen begins two days of her testimony on Capitol Hill on inflation
Janet Yellen, US Treasury Secretary, delivers the Tommaso Padua-Sciopa lecture at the Brussels Economic Forum in Brussels, Belgium, on Tuesday, May 17, 2022.
Valeria Mongli | Bloomberg | Getty Images
Ahead of Friday’s reading of consumer prices for May, inflation is taking center stage on Capitol Hill this week as Treasury Secretary Janet Yellen tests before a Senate committee on Tuesday and a House committee on Wednesday. Yellen, the former Federal Reserve chair, faces tough questions about how the Biden administration is handling the economy after it was wrong about inflation being temporary. High inflation from forty years ago pushed the national average gallon of gas to another record, dropping just 8 cents from $5, according to the AAA.
5. Senators introduce bipartisan bill to regulate cryptocurrency
The US Capitol Building in Washington, DC
Liu Ji | Xinhua News Agency | Getty Images
Sense. Kirsten Gillibrand, DNY, and Cynthia Lummis, R-Wyo, revealed. On Tuesday, it unveiled a bipartisan bill to create a regulatory framework around encryption. The Lummis-Gillibrand bill, the product of months of collaboration on Capitol Hill, amounts to classifying the vast majority of digital assets as commodities. The Responsible Financial Innovation Act would enable the CFTC to regulate most existing digital assets. Lummis and Gillibrand would like to work on developing their case into blockchain and crypto havens.
– CNBC channel Tanaya MachelAnd the Melissa RybkoAnd the Lauren Thomas And the Thomas Frank As well as Reuters contributed to this report.
– open an account now For the CNBC Investing Club to follow Jim Cramer’s every arrow move. Follow the actions of the wider market like a pro CNBC PRO.