Here are the most important news, trends and analysis that investors need to start their trading day:
- Wall Street looks lower with Nasdaq pacing for 2% decline
- Fed likely to signal a March interest rate hike at end of meeting
- Pfizer and BioNTech launch trial of Covid vaccine targeting omicron
- J&J expects at least $3 billion in Covid vaccine sales this year
- IBM jumps after company beats on quarterly earnings, revenue
U.S. stock futures dropped Tuesday, with the Nasdaq indicated down more than 2%, one day after a stunning market turnaround. The Nasdaq was down as much as 4.9% on Monday before mounting a startling comeback to close up 0.6%. However, the tech-heavy index was still firmly in a correction, down 13.7% from its record close in November. The Dow — down 1,115 points, or 3.25%, at Monday's lows — ended up 0.3%. The 30-stock average was 6.6% below its record close earlier this month. The S&P 500 also closed up 0.3% after being down nearly 4% at one stage Monday, briefing entering correction territory, off more than 10% from its record close to start the new year.
Bond yields moved higher Tuesday as the Federal Reserve was set to begin its two-day January meeting. The Fed's policy statement and Chairman Jerome Powell's news conference Wednesday afternoon are expected to reflect a willingness on the part of the central bank to take the steps necessary to fight inflation. Against the backdrop of a violent stock market correction, Fed officials are expected to say they're ready to increase interest rates from near zero as soon as March after bond-purchase tapering ends. Four hikes are seen this year.
Pfizer and BioNTech on Tuesday launched a clinical study to evaluate the safety and effectiveness of a vaccine that targets the Covid omicron variant. "While current research and real-world data show that boosters continue to provide a high level of protection against severe disease and hospitalization with omicron, we recognize the need to be prepared in the event this protection wanes over time and to potentially help address omicron and new variants in the future," Kathrin Jansen, head of vaccine development at Pfizer, said in a statement.
Four Dow stocks are reporting quarterly results Tuesday before the bell: 3M, American Express, Verizon and Johnson & Johnson. J&J, which makes one of the three Covid vaccines cleared for emergency use in the U.S., slightly beat estimates with adjusted fourth-quarter earnings but missed on revenue. However, the American drugmaker guided higher for full-year 2022 sales and adjusted per-share earnings. J&J expects its Covid vaccine to generate $3 billion to $3.5 billion in sales this year. Shares fell 1% in the premarket.
Dow stock Microsoft is set to deliver quarterly earnings after the bell. IBM, also a Dow component, Monday evening reported better-than-expected adjusted earnings and revenue for the fourth quarter. The stock gave up gains in Tuesday's down premarket. It had been up as mush as 6% in after-hours trading. During the period, IBM spun out is managed infrastructure services business into Kyndryl. Intel and Apple report quarterly results Wednesday and Thursday, respectively.