Here are the most important news, trends and analysis that investors need to start their trading day:
- Stock futures rise ahead of key inflation report, after volatile session
- Surge in consumer prices last month seen moderating somewhat
- U.S. oil prices advance after two days of sharp supply concern losses
- Coinbase slumps after the crypto exchange turns in weak quarter
- Stablecoin UST, meant to be dollar pegged, plummets below 50 cents
1. Stock futures rise ahead of key inflation report, after volatile session
U.S. stock futures rose Wednesday ahead of the first of two key inflation reports out this week. Wall Street saw a volatile session Tuesday, with the Dow Jones Industrial Average wiping out a 500-point gain, hitting a session-low down roughly 350 points before closing 84 points lower, a fourth straight down day. The S&P 500 and the Nasdaq were able to close higher, breaking three-session losing streaks. Dow stock Disney is set to report earnings after Wednesday’s closing bell.
2. Surge in consumer prices last month seen moderating somewhat
The 10-year Treasury yield dipped to around 2.9% on Wednesday, backing off multiyear highs. Traders will be watching the 8:30 a.m. ET release of the government’s consumer price index for April. Economists expect the CPI, which measures retail inflation, to show a year-over-year advance of 8.1% compared with March’s 8.5% gain. A reading along those lines could indicate that inflation has peaked, which would bode well for the Federal Reserve’s tightening approach to subdue price pressures.
3. U.S. oil prices advance after two days of sharp supply concern losses
A source of inflation in the economy has been oil prices and in turn record-high gasoline prices. West Texas Intermediate crude, the American benchmark, rose about 3.5% to $103 per barrel Wednesday after back-to-back sharp declines. The downturn in the two prior session was driven by supply concerns as the European Union works to gain support for a Russian oil embargo. A vote on the proposal, which needs unanimous approval, has been delayed as Hungary has dug in its heels in opposition.
4. Coinbase slumps after the crypto exchange turns in weak quarter
Shares of Coinbase sank 14.5% in Wednesday’s premarket, the morning after the crypto exchange reported quarterly revenue dropped 27% to $1.17 billion, falling short of estimates. It also announced a quarterly loss of $1.98 per share. Coinbase noted a decline in users, with the digital currency market recently experiencing a major downturn. Bitcoin has lost more than 50% since its all-time high of more than $68,000 in November.
5. Stablecoin UST, meant to be dollar pegged, plummets below 50 cents
The two main tokens from embattled crypto project Terra are now in free fall. UST, a so-called stablecoin that’s meant to maintain a 1-to-1 peg with the U.S. dollar, plunged to as low as 31 cents Wednesday. Sister token luna dived more than 80% to $3.78. Stablecoins are akin to bank accounts for the crypto economy, offering a sound store of value to avoid the kind of volatility cryptocurrencies like bitcoin have become notorious for — in theory, at least. While still new, UST has grown to become a major player in the crypto economy, with a circulating supply of 16 billion tokens.