Morning Brief

What to watch today: Stocks set to bounce ahead of the Fed's big rate decision


U.S. stock futures rose Wednesday as Wall Street prepares for what could be an even more aggressive Federal Reserve interest rate hike than the market was expecting just a few days ago. After last week's hotter-than-expected consumer inflation data, investors and the Fed got a look at how those higher prices affected shoppers as May retail sales unexpectedly fell 0.3%. (CNBC)

The Dow and the S&P 500 on Tuesday both dropped for five sessions in a row. The Nasdaq advanced modestly, breaking a losing streak of four straight trading days. The Dow closed more than 17% lower than its January record highs, still in a steep correction. The S&P 500 and the Nasdaq both remained in bear markets. (CNBC)

Fed policymakers are considering a 75 basis point interest rate increase as they conclude their two-day June meeting on Wednesday. That's what the markets now expect after everyone until this week was pretty much counting on another 50 basis point hike. The rate decision is scheduled for 2 p.m. ET, with Fed Chairman Jerome Powell's usual post-meeting news conference 30 minutes later. (CNBC)

* European Central Bank to create new tool to address fragmentation risk after bond yields surge (CNBC)


President Joe Biden on Wednesday called on U.S. oil refining companies to produce more of their products, saying they need to help alleviate the burden of high prices on consumers. "At a time of war – historically high refinery profit margins being passed directly onto American families are not acceptable," the president said in a letter to oil companies including Exxon (XOM) and Chevron (CVX). (CNBC)

Total mortgage application volume has fallen to half of what it was last year, according to the latest Mortgage Bankers Association's seasonally adjusted index. Sharply rising interest rates are decimating refinance volume — and those rates, along with sky-high home prices and a shortage of houses for sale, are hitting demand from potential buyers. (CNBC)

Last week, the average 30-year fixed-rate mortgage increased to 5.65%. And now this week, the 30-year mortgage hit 6.28% on Tuesday, according to a daily measure from Mortgage News Daily. After reaching record lows around 2.7% in late 2020, it started 2022 at 3.29%. (CNBC)

Bitcoin tumbled Wednesday to a new 18-month low, spurring a sharp fall in crypto markets sparked by crypto lender Celsius freezing customer withdrawals. The world's largest cryptocurrency fell to under $21,000. Bitcoin has lost around 28% since Friday and around 70% from its all-time high in November. (Reuters)

MicroStrategy (MSTR) lost ground again in the premarket as the price of bitcoin touched an 18-month low. The business analytics company has extensive bitcoin holdings. MicroStrategy said it has not received a margin call against a $205 million bitcoin-backed loan it took in March, according to a Reuters report on Wednesday.

Moderna (MRNA) on Tuesday won the recommendation of an FDA panel for use of its Covid vaccine in children 6 to 17 years old. A vote by the full FDA could come within a few days. That FDA panel on Wednesday will consider Moderna shots for kids under 6 and Pfizer (PFE) shots for kids under 5. (CNBC)


Stellantis (STLA) will begin indefinite layoffs next week at its Sterling Heights, Michigan stamping plant. The world's fourth-largest automaker, behind Jeep, Chrysler, Dodge, Fiat and Alfa Romeo brands, did not specify how many workers would be impacted. Stellantis rallied 3.4% in the premarket.

Zendesk (ZEN) is in settlement talks with activist investor Jana Partners after ending an unsuccessful effort to sell the software company, according The Wall Street Journal. The paper said proposed changes could involve CEO Mikkel Svane stepping down as well as changes to the board of directors. Zendesk added 1% in premarket trading.

Robinhood Markets (HOOD) was downgraded to underweight from neutral at Atlantic Equities, which cited Robinhood's revenue trends. Atlantic Equities has a price target of $5 per share on Robinhood, about 30% below Tuesday's close of $7.23. Shares of the trading platform operator slid 4.2% in the premarket.

Snowflake (SNOW) was upgraded to buy from hold at Canaccord Genuity. Shares of the cloud computing company have fallen more than 65% in 2022. However, Canaccord said the stock is now at an attractive entry point, given growing demand and promising new products. Snowflake gained 3.6% in the premarket.

Wheels Up (UP) rose 2.1% in premarket trading after Goldman Sachs began coverage of the private jet company with a buy rating. Goldman said Wheels Up is a leading company in an established and growing end market.

Sonos (SONO) was downgraded to equal-weight from overweight at Morgan Stanley, which is concerned about the impact of more cautious consumer spending. Shares of the high-end speaker maker fell 3.1% in the premarket.