Here are the most important news, trends and analysis that investors need to start their trading day:
- Nasdaq set to rebound from 2.8% drop as bond yields moderate
- Biden digs in on $3.5 trillion plan as shutdown and debt default loom
- Nearly 600 United employees face termination over Covid vaccine mandate
- Lucid begins production of its flagship Air sedan ahead of customer deliveries
- Elon Musk says U.S. government should avoid regulating cryptocurrencies
U.S. stocks bounced higher in Wednesday's premarket as the runup in bond yields moderated. The 10-year Treasury yield's spike to three-month highs above 1.567% slammed tech stocks Tuesday. The Nasdaq lost 2.8%. Big Tech and growth names are sensitive to higher rates since their high valuations are based on future growth and cash flow. The S&P 500 lost 2%. The Dow Jones Industrial Average sank 569 points, or 1.6%. With two days left in September, the Dow was down 3%; the S&P 500 was off than 3.7%; and the Nasdaq was nearly 4.7% lower in the historically nasty month for stocks.
President Joe Biden canceled a trip to Chicago that was supposed to focus Covid vaccinations so he can stay at the White House on Wednesday to try to build support for his party's $3.5 trillion budget plan. Democratic leaders want to use their slim majorities in the House and Senate to pass the package of social safety-net spending without GOP support.
- Biden met on Tuesday with hold-out centrist Senate Democrats Joe Manchin and Kyrsten Sinema.
- Progress on the Democrats' budget measure could determine when the House votes on the Senate-passed $1 trillion infrastructure bill.
- Also hanging in the balance is the immediate need to fund the federal government beyond Thursday's fiscal year-end to avoid a shutdown and to raise the nation's debt ceiling in coming weeks to avoid a default.
United Airlines said 593 employees are facing termination for failing to comply with the carrier's Covid vaccination policy, one of the strictest mandates from a U.S. company. More than 96% of United's 67,000-person U.S. workforce complied with the vaccine requirement. The deadline to show proof of vaccination was late Monday. Roughly 2,000 United employees sought exemptions from the mandate for religious or medical reasons. In announcing the exemptions this summer, the Chicago-based airline said employees with exemptions would be placed on temporary unpaid leave.
Lucid has started production of its first electric vehicles for customers, with deliveries scheduled to begin late next month. The milestone is crucial for the EV start-up, which debuted on the Nasdaq in July through a SPAC merger. It's viewed as a front-runner to rival Tesla. The top-end Lucid Air Dream Edition will be available in late October, followed by less expensive models. Lucid said it has received more than 13,000 reservations. The company told investors in July it expects to produce 20,000 Lucid Air sedans in 2022, generating more than $2.2 billion in revenue. Shares of Lucid rose 7% in the premarket.
Tesla CEO Elon Musk said the U.S. government should steer clear of trying to regulate cryptocurrencies. "It is not possible to, I think, destroy crypto, but it is possible for governments to slow down its advancement," Musk said Tuesday at the Code Conference. Musk, who frequently touted his support for digital coins on Twitter, was responding to a question from New York Times columnist Kara Swisher. Tesla said earlier this year that it bought bitcoin to "maximize returns on our cash."