5 things to know before the stock market opens on Monday, June 13

Here are the top news, trends and analysis that investors need to start their trading day:

1. Futures plunge, as S&P 500 prepares to return to bear market

Traders work on the floor of the New York Stock Exchange (NYSE) on June 10, 2022 in New York City.

Spencer Platt | Getty Images

US stock futures sank Monday after the worst week on Wall Street since January. Bond yields rose as investors prepared for the Federal Reserve to raise interest rates later this week after hotter-than-expected consumer inflation data on Friday. The Dow Jones Industrial Average is set to open 500 points, or 1.7%, lower on Monday, plunging further into the correction. It looks like the S&P 500 and Nasdaq will open 2% and 2.7% lower, respectively, with the previous tracking of re-entering bear market territory and testing this year’s low of 3,810.32 last month. The Nasdaq has been mired in a bear market since March.

2. Rising Bond Yields Hit Stocks As Recession Fears Grow

The two-year Treasury yield on Monday reached its highest level since 2007, trading around 3.16%. At one point, the two-year yield briefly reversed and went above its 10-year counterpart for the first time since April. The so-called inversion of the yield curve is seen as an indicator of recession. The benchmark 10-year yield later rose to 3.26%. The 5-year yield was at about 3.4% higher than the 10-year and 30-year yields at about 3.3%. Short-term yields have moved more in the past few days due to their high sensitivity to rising Fed rates.

3. The Fed Is Expected To Raise Interest Rates 0.5% This Week, But Markets Want More

The Federal Reserve is scheduled to hold its June meeting on Tuesday and Wednesday, with a 0.5% rate increase expected. Anything more than that would be a surprise, but there was a belief in the markets that central bankers would have to get bolder to quell inflation. The Federal Reserve is in a tough spot, trying to smooth things over with tighter monetary policy while trying not to push the economy into a recession. Ahead of the Fed’s monetary policy decision, Wall Street will look at the release of the Producer Price Index on Tuesday and retail sales data on Wednesday to put last week’s hot consumer inflation report into context.

4. Bitcoin drops below $24,000 as crypto market sells out

Bitcoin slumped 14%, to below $24,000 on Monday, hitting its lowest level since December 2020, as investors dump the cryptocurrency in a broader sell-off of risky assets. Also raising concerns, a crypto lending company called Celsius has temporarily suspended withdrawals for its customers. Over the weekend and into Monday morning, the value of the entire cryptocurrency market fell below $1 trillion for the first time since February 2021, according to data from CoinMarketCap. The cryptocurrency market has also been on alert since mid-May when the so-called algorithmic stablecoin terraUSD and its sister coin, Luna, collapsed.

5. The first company to manufacture electric cars after SPAC declares bankruptcy

EV startup Electric Last Mile Solutions said late Sunday that it plans to file for Chapter 7 bankruptcy less than a year after it went public through a special purpose buyout merger. ELMS’ public offering, in late June 2021, came amid a flurry of SPAC deals that made electric vehicle makers public. The company is the first among the electric car makers after SPAC, which has said it will file for bankruptcy. In February, Chairman and Founder Jason Law and then-CEO Jim Taylor departed after an internal investigation found the company’s past financial statements were unreliable.

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