5 things you need to know before the stock market opens on Wednesday 25 May

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

1. Nasdaq futures fell more than a day after the technology index fell by more than 2%

Traders on the NYSE floor, May 23, 2022.

Source: NYSE

US stocks fell on Wednesday, a day after the Nasdaq fell 2.4% as Snap ‘s 43% drop in earnings warning dragged many other tech stocks down. The Nasdaq bearish market fell 30% from its most recent high on Tuesday. The S&P 500 fell 0.8%, breaking a two-season winning streak, but remained above the bear market level which was below 20% or more from a previous high. The Dow made a small profit for the third consecutive positive session. However, the 30-day moving average remained in a sharp correction, as set by a 10% drop or more from its most recent high.

2. Investors seek bond security just minutes before the Fed meeting in May

Federal Reserve Chairman Jerome Powell speaks at a press conference following a meeting of the Federal Open Market Committee on May 4, 2022 in Washington, DC. Powell announced that the US Federal Reserve is raising interest rates by half a percentage point to fight record inflation.

Win Mcnamee Getty Images

Bond prices last were the recipient of the sell-off of shares. The 10-year bond yield, which is moving in the opposite direction to the price, fell to about 2.7% on Wednesday, in view of the afternoon publication of the minutes from the policy meeting of the Federal Bank in May. Investors are hoping to get more information on the central bank’s thinking on inflation and the economy. Earlier this month, the Fed raised interest rates by 50 basis points, double the March increase.

3. Still high mortgage rates continue to reduce demand for mortgages

A sign of a house for sale is displayed in the Alhambra, California on May 4, 2022.

Frederic J. Brown | AFP | Getty Images

Although the 10-year yield recently fell to a 2018 high of more than 3%, it is still more than double the December low, raising mortgage rates and reducing demand for mortgages. Applications for home purchase were stable from week to week and decreased by 16% compared to a year ago. Mortgage demand from home buyers is now close to the lows last seen in the spring of 2020, at the start of the Covid pandemic, shortly before frantic demand pushed prices higher at an astonishing rate over the past two years. Last week, mortgage refinancing applications fell by 2% and were 75% lower than the same week a year ago.

4. Dick sinks, Nordstrμm rises after very different quarters, perspective

The cars appear parked in front of a Dick sportswear store in Monroe Marketplace, Pennsylvania.

Paul Weaver | SOPA Images LightRocket | Getty Images

Shares of Dick’s Sporting Goods sank more than 11% in Wednesday’s premarket, shortly after cutting its financial forecast for the full financial year, citing high inflation and continuing supply chain challenges. Dick’s decision to reduce his lead comes after similar adjustments by Walmart, Target and Kohl’s. The sportswear chain exceeded quarterly earnings and revenue expectations as buyers spent money on golf clubs, soccer items and sportswear.

A buyer leaves a Nordstrom store on May 26, 2021 in Chicago, Illinois.

Scott Olson Getty Images

In contrast to the problems caused by inflation in other retailers, Nordstrom gained almost 6% in pre-market trading, albeit overnight highs. The high-end department store chain raised its annual sales and profit forecast after Tuesday’s closing bell. While reporting a slightly larger-than-expected loss for the first quarter, Nordstrom saw sales rise 18.7% to pre-pandemic levels as shoppers struggled to refresh their closets with brand names and shoes. .

5. Wendy’s largest shareholder promotes a deal for the fast-food chain

The logo of a Wendy’s restaurant appears in Plano, Texas, on July 2, 2020.

Dan Tian | Xinhua via Getty Images

Wendy’s shares gained about 9% in premarket after it became known late Tuesday in a statement that the largest shareholder of the fast-food chain, Trian Partners, is investigating a possible deal for the company. Trian, founded and run by Nelson Peltz, first invested in Wendy’s in 2005. The hedge fund currently holds a 19.4% stake in Wendy’s. Trian holds three positions on the fast-food board, including one held by Peltz, the president. Trian said it had previously urged Wendy’s to cut restaurant costs, improve its operations and grow its brand.

– The CNBC Peter Schacknow, Diana Olik, Lauren Thomas and Sarah Salinas contributed to this report.

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