Here are the most important news, trends and analysis that investors need to start their trading day:
1. Dow futures appear after the 30-stock average’s six-game losing streak
The Twitter logo and trading information are displayed as a trader works on the floor of the New York Stock Exchange (NYSE) in New York, U.S., May 3, 2022.
Brendan Mcdermid | Reuters
U.S. stock futures rallied on Friday as the S&P 500 tried not to join the Nasdaq in a bear market, which is defined as a decline of 20% or more from a previous high.
- Nasdaq futures led the way higher despite Twitter shares falling 12% pre-market. The stock fell 25% after Elon Musk tweeted on Friday that his deal to buy the social network was “temporarily on hold”. Twitter shares were reducing those losses when Musk later tweeted that he was “still committed” to the deal.
- The Dow Jones Industrial Average fell for the sixth straight session on Thursday, sinking further into a correction, defined as a decline of 10% or more from a previous high. The S&P 500 fell slightly. The Nasdaq managed a slight gain.
2. Bond yields rose after Powell said he couldn’t guarantee a soft landing
On Friday, the 10-year Treasury yield rose but remained below 3%, a key level that was breached on May 2 for the first time since late 2018.
- Bond yields rose rapidly on the belief that the Federal Reserve will need to act more aggressively on raising interest rates to fight inflation. There are concerns that inflation will remain high even as the economy slows.
- Fed Chairman Jerome Powell said in an interview published Thursday on Marketplace that he could not promise a so-called soft landing for the economy. He warned that controlling inflation could cause economic hardship, but remains his top priority.
3. Two tweets from Elon Musk about his Twitter deal surfaced
With two tweets on Friday morning, Musk sent Twitter shares on a wild ride. After saying he suspended his Twitter offering to get more information about the number of fake accounts on the social media platform, he later said he was “still committed to acquiring” . The first tweet arrived at 5:44 a.m. ET. The second tweet was posted about two hours later.
Tesla CEO Musk announced last month that he intended to buy Twitter for $44 billion and he previously tweeted that one of his top priorities would be to remove “spam bots” from Twitter. the platform. Shares of Tesla, which have recently fallen on concerns that Musk’s Twitter deal was a distraction, rose more than 5% on Friday on the first tweet and maintained those gains after the second.
4. Some stablecoins are gaining a foothold, helping to drive the crypto market higher
Tether has long wondered if it has enough assets to justify its peg to the dollar.
Tiffany Hagler | Bloomberg via Getty Images
Tether, the world’s largest stablecoin, regained its peg to the dollar after more than $3 billion worth of tokens left the system in a single day. The cryptocurrency – which is believed to still be worth $1 – fell to 95 cents on Thursday. A controversial stablecoin known as TerraUSD or UST, which is supposedly pegged 1-to-1 to the dollar, has crashed in recent days, trading around 8 cents on Friday. Luna, a token closely associated with UST, is now worth $0.
- The stablecoin saga has added a layer of uncertainty that has contributed to steep declines across the entire crypto market. On Friday, bitcoin was back above $30,000, rebounding from levels not seen since late 2020. At current levels, bitcoin, the world’s largest cryptocurrency, was down more 50% from its all-time high of over $68,000 in November.
5. The CEO of a major crypto exchange takes a big stake in Robinhood
Sam Bankman-Fried, CEO of FTX US Derivatives, testifies at the House Agriculture Committee hearing titled Changing Market Roles: The FTX Proposal and Trends in New Clearinghouse Models, at Longworth Building on Thursday, May 12, 2022.
tom williams | CQ-Roll Call, Inc. | Getty Images
- Shares of Robinhood, a popular stock and crypto trading platform, jumped more than 23% in Friday’s premarket. In regular trading on Thursday, the stock hit an all-time low. Robinhood ended the session at a price of $8.56, about 77% off its IPO price last July.
- The document says Bankman-Fried does not plan to take “any action to change or influence control” of the company. The filing also says he may “from time to time engage in discussions” with management.
—CNBC Jesse Book, Vicky McKeever, Jeff Cox, Sam Shead and Tanaya Macheel contributed to this report.
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