Here are the most important news, trends and analysis that investors need to start their trading day:
- Wall Street set to open lower after Friday's sharp declines
- Oil, Chinese stocks crushed as lockdown in Shanghai persists
- Coca-Cola's profit beat leads busiest week of earnings
- Twitter jumps 5% on reports it's ready to accept Elon Musk's offer
- U.S. pledges more military aid for Ukraine as officials visit
U.S. stock futures pointed to sharp declines on Wall Street to start the new week after Friday's plunge. Concern deepened about just how aggressive the Federal Reserve will be with interest rates hikes to fight inflation, sending the Dow Jones Industrial Average down 981 points, or 2.8%, for its fourth straight negative week. The S&P 500 and the Nasdaq suffered similar losses, sinking roughly 2.8% and 2.6%, respectively, for their third straight negative weeks. The Nasdaq closed Friday in bear market territory. The 10-year Treasury yield on Monday backed away from last week's late 2018 highs over 2.9%.
Oil prices sank 4.5% on Monday, extending last week's decline, as concern mounted over how prolonged Covid lockdowns in Shanghai and further increases to U.S. rates might hurt global growth and crude demand. China's struggle to contain its worst Covid outbreak of the pandemic in its biggest city and as well rising cases in Beijing slammed Chinese stocks. The Shenzhen component tumbled 6%, while the Shanghai composite declined 5.1%. Hong Kong's Hang Seng index fell 3.7%. Japan's Nikkei dropped nearly 2%.
Coca-Cola reported, before the opening bell Monday, quarterly earnings and revenue that topped expectations as consumers drank more of its trademark soda, Powerade and other beverages. The Dow stock rose nearly 2% in the premarket. Despite the suspension of its Russian business, Coca-Cola reiterated its full-year revenue and earnings outlooks. This week is the busiest of the earnings season, with about 160 companies in the S&P 500 expected to report, including megatech names Amazon, Apple, Google-parent Alphabet, Facebook-parent Meta Platforms and Microsoft.
Twitter shares jumped 5% in the premarket on reports from Bloomberg and Reuters that the social media company could reach a deal with Elon Musk as early as today. Earlier this month, Musk offered to buy the Twitter, which became more receptive after the Tesla and SpaceX CEO revealed $46.5 billion in secured financing. Twitter's board had met Sunday to discuss Musk's financing plan for his proposed bid, a source close to the situation told CNBC. The board negotiated with Musk into the early hours of Monday, according to The New York Times.
U.S. Secretary of State Antony Blinken and Defense Secretary Lloyd Austin visited Ukraine on Sunday to discuss military aid with Ukraine's president, Volodymyr Zelenskyy. At the meeting in Kyiv, which was shrouded in secrecy and the highest-level visit to Ukraine by U.S. officials since the invasion began, America pledged just over $700 million in military financing to help Ukraine and other allied countries in Central and Eastern Europe involved in the war effort. Russia's invasion of Ukraine entered its third month on Sunday.