Here are the most important news, trends and analysis that investors need to start their trading day:
1. Wall Street turns decisively lower after another hot inflation report
Traders work on the floor of the New York Stock Exchange
US stock futures turned sharply lower after Friday’s before-the-bell inflation report showed a bigger-than-expected increase. On the data, the 10-year Treasury yield initially jumped to more than 3.08%. Rising bond yields Thursday slammed stocks as the Dow Jones Industrial Average fell 638 points or nearly 2%. The S&P 500 and the Nasdaq lost roughly 2.4% and 2.8%, respectively.
- Major tech names struggled Thursday, with Facebook parent Meta Platforms sliding 6.4%, Amazon dropping more than 4% and Apple sinking 3.6%. Those shares got a bounce earlier in Friday’s premarket trading but then turned lower.
- However, Netflix slid 5% in premarket trading after Goldman Sachs downgraded the stock to sell from neutral and cut the price target to $186 per share from $265. Netflix closed nearly 5% lower on Thursday at almost $193 per shares.
2. Consumer inflation in May rose at fastest rate since 1981
A supermarket in Washington, DC, on May 26, 2022.
Nicholas Kamm | AFP | Getty Images
May’s consumer price index increased 8.6% year-over-year, the fastest advance in more than 40 years. On a monthly basis, headline CPI was up 1%, also higher than expected. The Federal Reserve is expected to raise interest rates by a half-point next week and another half-point in July. But after that, the pace to fight four-decade high inflation is less clear. Bond yields have been rising and the stock market has been falling on concern that the Fed’s approach to tightening will have to get even more aggressive to quell prices pressures, risking putting the economy into a recession.
3. National average for gas prices just 1 cent below $5 per gallon
Gas prices over $5.00 a gallon are displayed at gas stations in New Jersey, USA, on June 7, 2022.
Lokman Vural Elibol | Anadolu Agency | Getty Images
The national average price for a gallon of gas, according to AAA, keeps inching up, now just 1 cent shy of $5, as oil prices continue to head higher. West Texas Intermediate crude, the American benchmark, rose Friday, trading at more than $122 per barrel. Those gains were, however, capped as traders worried that new lockdown measures in Shanghai for mass Covid testing might outweigh solid oil and gas consumption for the world’s top consumer, the United States. But for the time being, peak summer driving demand in the US was boosting crude prices.
4. Two stay-at-home stocks get crushed on signals of business weakness
Shares of two companies, which thrived during the Covid pandemic, were dropping in Friday’s premarket, the morning after signals of weakness in their businesses.
DocuSign sank 25% in the premarket. The electronic signature software vendor’s weaker-than-expected earnings for its fiscal first quarter overshadowed a revenue beat. Stitch Fix plummeted roughly 20% in before-the-bell trading. The online personalized styling platform confirmed planned layoffs of 15% of salaried positions within its workforce as it reported disappointing quarterly results and warned about the current quarter.
5. Capitol riot House panel blames Trump for Jan. 6 ‘attempted blow’
US President Donald Trump speaks to supporters from The Ellipse near the White House on January 6, 2021, in Washington, DC.
Brendan Smialowski | AFP | Getty Images
The House select committee investigating the Jan. 6 Capitol riot began laying out its initial findings Thursday night in the first in a series of public hearings. The panel said the assault was not spontaneous, calling it an “attempted coup” and a direct result of then-defeated President Donald Trump’s effort to overturn the 2020 election. Trump, in a social media message after the hearing, criticized the committee for not showing “the many positive witnesses and statements” and playing “only negative footage.” More hearings are set to take place over the next few weeks.
—CNBC’s Jesse Pound, Samantha Subin, Patti Domm, Jordan Novet, Lauren Thomas and Kevin Breuninger as well as The Associated Press contributed to this report.
— Sign up now for the CNBC Investing Club to follow Jim Cramer’s every stock move. Follow the broader market action like a pro on CNBC Pro.