Here are the most important news items that investors need to start their trading day:
1. Waiting for the Fed
The Federal Reserve's policy-making board begins its two-day meeting Tuesday, with just about everyone on Wall Street expecting the central bank to hike its benchmark rate Wednesday. That would mark the tenth rate increase for the Fed since last year, as Chairman Jerome Powell and crew have tightened policy to fight inflation. Recent shocks in the banking sector, however, have pushed the Fed to take an even sharper wait-and-see approach. Many market observers think the likely quarter-point hike Wednesday will likely be it for a while. Powell's press conference after the announcement will likely provide more clues about what the Fed will do next. Follow live market updates.
2. Default could be weeks away
Markets may start paying closer attention to the debt ceiling fight in Washington now that a potential U.S. sovereign debt default could come as soon as early June. Treasury Secretary Janet Yellen on Monday wrote to House Speaker Kevin McCarthy to tell him that the U.S. could run out of money to pay its bills as early as June 1. Her letter added more pressure to a process already fraught with partisan tension. McCarthy has sought large spending cuts in exchange for raising the debt limit into next year, in the thick of the 2024 campaign. President Joe Biden, likewise, has refused to negotiate on the limit, saying he would talk about spending in a separate context. The president called McCarthy, House Minority Leader Hakeem Jeffries, Senate Majority Leader Chuck Schumer and Senate Minority Leader Mitch McConnell to the White House for a pivotal meeting May 9 to try and hash it out.
3. Pfizer's Covid drag
Pfizer reported better-than-expected profit and revenue Tuesday morning, even though its top line declined nearly 30% since last year. The prime culprit? Softness in the company's Covid product sales. With life returning to pre-coronavirus normal in some ways, demand for vaccines and treatments for the disease has declined. The U.S. government has also scaled back its Covid response. Pfizer said it's sticking with its outlook for the year, which accounts for steep drops in Covid product sales. Without the impact of those products, however, Pfizer said it expects revenue to grow in 2023.
4. Hollywood writers go on strike
Hollywood writers for movies and TV are going on strike Tuesday after the Writers Guild and the Alliance of Motion Picture and Television Producers failed to reach an eleventh-hour deal. It's the first work stoppage for the writers in 15 years. Since then, the industry has undergone drastic changes, particularly with the explosion of streaming services and content. Now, however, the writers are seeking higher pay at a time when studios are cutting back on spending as executives and boards, faced with steep streaming losses, focus more on generating profits than adding subscribers. The strike could delay the start of the fall TV season and alter movie production schedules. Late night TV and soap operas are likely to be affected right away.
5. Nice pop for Uber
Uber shares jumped in the premarket session Tuesday after the ride-hailing company posted better revenue than Wall Street had expected. The company also reported a narrower loss than feared. Uber saw gross bookings for its mobility business surge 40% year over year to $14.98 billion, showing that people are taking more rides as they shake off Covid concerns and restrictions. The Uber Eats food delivery business, meanwhile, posted an 8% increase in gross bookings to $15.02 billion. The number of active platform consumers jumped from a year earlier, and the number of rides completed also surged.
– CNBC's Alex Herring, Christina Wilkie, Annika Kim Constantino and Ashley Capoot contributed to this report.
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