Here are the most important news items that investors need to start their trading day:
1. Stress and confusion
Investors are looking for clarity after a few days of dramatic turns. Monday was a mess as markets tried to figure out the ramifications of the Signature Bank and Silicon Valley Bank shutdowns. The Dow finished down, marking its fifth straight losing day, while the Nasdaq managed to squeak out a slight win. Regional bank stocks took a huge hit as the government's actions to limit the fallout from Silicon Valley Bank and Signature failed, at least for the moment, to reassure investors and depositors alike. First Republic, for instance, fell a whopping 62% on Monday. Yet, those stocks could be in store for a rebound Tuesday. Follow live markets updates.
2. Where do rates go from here?
The Federal Reserve is still on track to raise its benchmark interest rate by a quarter point next week, despite the second- and third-biggest bank failures in history. As of Monday, even with the turmoil in the market, especially among regional banks, traders saw an 85% probability that the rate hike would still happen as the central bank tries to cool inflation. Goldman Sachs stood out as the contrarian voice, however, arguing that Fed Chairman Jerome Powell and crew will hold off for now on a rate increase. "We think Fed officials are likely to prioritize financial stability for now, viewing it as the immediate problem and high inflation as a medium-term problem," Goldman said in a note to clients. The Fed's next policy-setting meeting is scheduled for March 21-22.
3. Eyes on CPI
Speaking of inflation, the government's consumer inflation report for February is in. It came in somewhat cooler than January's consumer price index, showing that the Fed continues to make a little progress in its battle against price increases. This report takes on added significance given the context of the Silicon Valley Bank and Signature Bank failures, which triggered turmoil among regional banks. As CNBC's Patti Domm points out, before the banking upheaval, a hot CPI report might have pushed the Fed to jack up rates by half a point next week. Now, with the stability of the financial system at the top of everyone's mind, the Fed likely won't go higher than a quarter point.
4. Special delivery
Shares of Uber, Lyft and DoorDash all jumped in off-hours trading after a California appeals court allowed such companies to treat their drivers as independent contractors and not employees. The decision upheld a measure called Proposition 22, which California voters approved in November 2020 after a costly campaign on which ride-share and delivery companies spent more than $180 million. Monday's ruling overturned a lower court's rejection of Proposition 22, which was contested by a group of rideshare drivers. The measure exempts Uber and others from following several compensation laws.
5. Ukraine-Russia grain deal extended
Authorities extended a Russian-Ukraine grain export deal for 60 days, Russia's deputy foreign minister told a Russian news agency. The agreement has enabled Ukraine to export wheat, corn and other agricultural products through the Black Sea. A Russian blockade during the earlier stages of the war had hurt global food supplies and fueled price inflation. Elsewhere, Ukraine President Volodymyr Zelenskyy defended his decision to continue defending the eastern Ukrainian city of Bakhmut. "We must destroy the enemy's military power - and we will destroy it," he said. Follow live war updates.
– CNBC's Sarah Min, Jeff Cox, Patti Domm, Rohan Goswami and Holly Ellyatt contributed to this report.
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