Here are the most important news, trends and analysis that investors need to start their trading day:
1. Futures rose after Nasdaq's worst month since 2008
U.S. stock futures were mixed on the first trading day of May. The Nasdaq closed out April with its worst monthly performance since 2008 as investors faced headwinds that aren't going away anytime soon from a more hawkish Federal Reserve to rising bond yields to persistent inflation to Covid case spikes in China and Russia's ongoing war in Ukraine.
- The Nasdaq sank 4% alone Friday en route to a nearly 13.3% loss for April. Tech stocks were the epicenter in last month's sell-off, capped with Amazon's 14% decline Friday, its biggest one-session drop since 2006, after reporting a weak quarter. Amazon was losing nearly 2% in Monday's premarket.
- Breaking two-session winning streaks, the Dow Jones Industrial Average and the S&P 500 on Friday lost 2.8% and 3.6%, respectively. The Dow and S&P 500 had their worst months since March 2020, the month the Covid pandemic was declared. The Dow sank 4.9% for April. The S&P 500 dropped 8.8% last month.
2. Bond yields run up again ahead of Fed meeting
The benchmark 10-year Treasury yield on Monday was making a run at 3% again, trading around its recent late 2018 high of 2.94%. The Fed's two-day May meeting ends Wednesday, with expectations for a 50 basis point increase in interest rates. The market expects a rate hike of at least 25 basis points at each of the remaining five meetings this year to fight rampant inflation. The Fed raised rates by 25 basis points in March, the first such move in more than three years. U.S. oil prices, while falling 3% on Monday, were still above $100 per barrel. They've soaring lately, adding to the inflationary pressures in the economy.
3. Earnings in March quarter on pace for slower growth
Earnings season continues this week, though at a slower pace.
- Eighty percent of S&P 500 companies have reported positive earnings per share surprises for Q1, above the five-year average of 77%, according to FactSet.
- So far, the March quarter blended earnings growth rate, which includes reported results and estimates from S&P 500 companies yet to report, is 7.1%. If that were to be the final rate for the quarter, it would mark the slowest year-over-year advance since the December quarter of 2020.
- For the current quarter, 26 S&P 500 companies have issued negative EPS guidance and 17 have issued positive EPS guidance.
4. Buffett says Berkshire bought more Apple shares
Warren Buffett told CNBC's Becky Quick that Berkshire Hathaway bought an additional $600 million worth of Apple shares following a three-day sell-off earlier last quarter. Buffett said: "Unfortunately the stock went back up, so I stopped. Otherwise who knows how much we would have bought." Buffett's comments came on the sidelines this weekend's Berkshire's annual shareholders meeting in Omaha, Nebraska.
On Saturday, Buffett said Berkshire now owns about 9.5% of Activision Blizzard, betting that Microsoft's proposed acquisition of the video game company will close. According to a recent filing, Berkshire's Chevron investment was worth $25.9 billion at the end of March, a big jump from its value of $4.5 billion at the end of 2021.
5. Moderna Covid vaccine could be first cleared for kids under 5
According to Moderna, its Covid vaccine for children under 6 years old will be ready for review by a Food and Drug Administration panel when it meets in June. Moderna applied for emergency use authorization for the treatment last week. Moderna's vaccine could be the first to win U.S. approval for children under the age of 5. Pfizer also expects to have its vaccine data for children under 5 ready by the June review. Pfizer's regimen is already cleared for everyone 5 years old and older.
— CNBC's Pippa Stevens, Hannah Miao, Tanaya Macheel, Matt Clinch and Yun Li as well as Reuters contributed to this report.
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