Dow closes more than 300 points lower on discouraging Home Depot forecast, debt ceiling concerns: Live updates

Stocks declined Tuesday, with the Dow Jones Industrial Average closing below its 50-day average for the first time since March 30.

The Dow traded 336.46 points lower, or 1.01%, to 33,012.14. The S&P 500 fell 0.64% to 4,109.90. The Nasdaq Composite declined 0.18% to 12,343.05.

— Sarah Min

Lumber prices have tumbled more than 80% since reaching a peak in May 2021. Back then, lumber futures traded at more than $1,700 per thousand board feet. They are now around $340 per thousand board feet.

This fall comes as home renovations appear to ease following a boom during the pandemic. Home Depot reported its biggest revenue miss in more than 20% years earlier Tuesday, in part due to consumers delaying larger projects.

— Fred Imbert

The Dow Jones Industrial Average was headed for a losing day in the final hour of trading.

The 30-stock index traded 235 points lower, or 0.71%. The S&P 500 fell 0.29%. Meanwhile, the Nasdaq Composite bucked the trend, gaining 0.19%.

— Sarah Min

Chase Coleman's Tiger Global revealed a $140 million play on Apple in the first quarter and a slightly higher bet on Taiwan Semiconductor, recent securities filings show.

The tech-centric hedge fund also initiated new positions in a host of semiconductor names and software stocks.

Read more on Tiger Global's latest bets here.

— Samantha Subin

Only one sector has seen more highs than lows in the past two weeks: consumer staples.

Not even technology, health care and communications managed that over the same time period, Strategas' Chris Verrone wrote in a Tuesday note.

— Sarah Min

Six months after Morgan Stanley pulled its rating on Carvana shares, the firm reinstated coverage of the stock with an equal-weight rating.

Morgan Stanley's price target of $12 implies just 3.6% upside from where shares closed on Monday. Meanwhile, the stock was down more than 6% late Tuesday morning. 

The firm's bear case for the stock anticipates a drop to a valuation of $1. However, in his bull case, shares could pop to $60, a jaw-dropping jump of more than 400% from the previous session's close.

"While the stock still offers a wide range of potential outcomes, we have improved confidence in management's ability to mitigate operational cash burn while passing through the worst of [the] used car market dislocation," read a Monday note from the firm. 

CNBC Pro subscribers can read more about the call here.

— Hakyung Kim

Japan's Topix reached its highest level since August 1990, with the stock exchange closing at 2,127.18 on Tuesday.

"Globally, we struggle to find a better collection of charts than what our regular Japan reviews reveal," Strategas' Chris Verrone wrote in a Tuesday note. "The TOPIX has broken out, and it's broad, with roughly 80% of issues above the 200-day (compared to just 50% for S&P)."

Elsewhere, Verrone pointed out that the cap-weighted Nikkei exchange has already topped 2021 highs, according to the note.

— Sarah Min

Here are some of the names making moves in midday trading:

• Horizon Therapeutics — Shares sank about 14% after the Federal Trade Commission sued to block the biotech firm's $27.8 billion acquisition by biopharmaceutical giant Amgen.
• Vodafone — U.S.-listed shares of the British telecommunications company fell more than 7% after Vodafone said it will cut 11,000 jobs. CEO Margherita Della Valle said the company "must change."
• Etsy — The stock dropped nearly 6% after Morgan Stanley said it sees slower growth ahead for Etsy and cut its price target to $74 per share from $79. The new price target suggests 24% downside from Monday's close.

To see more stocks making midday moves, read the full story here.

— Michelle Fox

Morgan Stanley analyst warned of potentially big swings for some of the regional banks it covers as the fallout for the crisis continues.

Analyst Manan Gosalia downgraded Commerce Bancshares and Prosperity Bancshares to underweight from equal weight.

He lowered his price targets by a median of 5% on weaker multiples. Commerce Bancshares' new price target of $48 implies shares declining 3.5% from Monday's close. Meanwhile, the analysts' new price target of $60 per share for Prosperity Bancshares implies a 1% loss from where shares closed on Monday. 

Shares of Commerce Bancshares and Prosperity Bancshares were down 2% and 1.3%, respectively.

CNBC Pro subscribers can read about the full downgrade here.

— Hakyung Kim

Cleveland Federal Reserve President Loretta Mester said Tuesday that inflation is too high for the central bank to change directions on policy now.

"We've seen inflation move down from a year ago from last summer," she said during an appearance at the Central Bank of Ireland, according to a transcript of the event. "But it's still very high in the U.S. and I think that we just have to stick with what we're doing. Because the long run implications for high inflation on the US economy are not good."

A nonvoting member on the rate-setting Federal Open Market Committee, Mester added that she'd like to see rates at a place where a cut or increase would be equally likely as the next move.

"The question, you know, in my mind is have we gotten to that rate yet? And at this point, given the data we've gotten so far, I would say no, I don't think we're at that rate yet," she said.

—Jeff Cox

Energy and utilities stocks were the biggest laggards in the S&P 500 on Tuesday, with each sector down 2.5% and 1.9%, respectively.

APA, Halliburton and Schlumberger N.V. share all declined. They were each down more than 3%.

AES fell 4.7%, while Dominion Energy declined 2.7%.

— Sarah Min

The Federal Reserve's aggressive interest rate hiking campaign helped cause the troubles in the mid-size regional banking industry, Rep. Andy Barr charged Tuesday.

Speaking during a House Financial Services Committee hearing on the implosion of Silicon Valley Bank and other institutions, the Kentucky Republican grilled Michael S. Barr, the Fed's vice chair for banking supervision.

Rep. Barr asked why a report that Fed Governor Barr prepared on the bank failures didn't include an examination of the impact that the central bank's rate hikes had on financial instability.

"The failure of the Fed to acknowledge that monetary policy errors are the underlying cause of bank instability is very revealing," Rep. Barr said.

—Jeff Cox

Shares of RH slid 7% after a regulatory filing showed that Warren Buffett's Berkshire Hathaway dumped its stake in the luxury furniture retailer last quarter.

The Omaha-based conglomerate had owned 2.36 million shares of RH at the end of 2022. Berkshire first bought the stock in the first quarter of 2019. RH has fallen 8% this year, following a 50% decline in 2022.

— Yun Li

BMO Capital Markets upgraded Gilead Sciences shares to outperform from market perform in a Tuesday client note.

"Simply put, Gilead has the best cell therapy manufacturing capabilities vs. competition from Novartis and Bristol. When comparing the three, Gilead is not supply constrained, able to meet increasing demand for Yescarta and Tecartus," BMO said in a Tuesday note. 

Gilead Sciences shares were up 0.4% during midday trading.

CNBC Pro subscribers can read about the full upgrade here.

— Hakyung Kim

Nine stocks in the S&P 500, including PayPal, CVS Health and Pfizer made fresh 52-week lows Tuesday as the broader market struggled to get its footing in early trading.

Check out other names that reached their lowest levels in at least a year:

• Newell Brands reached lows not seen since April 2009
• Danaher traded at lows not seen since April 2021
• Organon reached an all-time low
• Leidos Holdings traded at lows not seen since March 2020
• 3M traded at lows not seen since January 2013
• Crown Castle traded at lows not seen since January 2019

Some stocks made fresh 52-week highs, however:

• Amerisourcebergen traded at all-time highs back to its IPO in April 1995
• Cardinal Health reached levels not seen since April 2016
• TransDigm Group traded at all-time high
• Lam Research (LRCX) traded at levels not seen since March 2022
• Microsoft reached levels not seen since April 2022
• Nvidia traded at levels not seen since January 2022

— Fred Imbert, Chris Hayes

Bank of America Analyst Ebrahim H. Poonawala resumed coverage on regional bank Western Alliance with a buy rating.

"WAL does not share a ton in terms of business model and balance sheet characteristics relative to the three failed banks," Poonawala wrote in a Tuesday note. He added that Western Alliance's "business model [is] more resilient than perceived."

Western Alliance shares have lost more than 58% over the past three months. On Tuesday, the stock popped 4%.

CNBC Pro subscribers can read about the call here.

— Hakyung Kim

Only two S&P 500 sectors out of 11 were trading in positive territory on Tuesday morning.

Information technology and communication services stocks outperformed in the broader index, up about 0.35% and 0.32%, respectively.

Semiconductor stocks jumped, with shares of Advanced Micro Devices rising 4.5%, and Lam Research up by 1.3%.

Google-parent Alphabet shares were also higher, up about 1.7%.

— Sarah Min

In the past, bull and bear markets have been differentiated by key drivers of stock valuations, such as inflation in the 1970s, or the nominal 10-year yield in the 1980s and 1990s. During the Covid-19 pandemic and after, that factor has been real interest rates — something Wolfe Research expects will change.

"Looking ahead, our sense is that the key driver of valuations will transition away from real rates and toward the growth outlook — which is typical heading into a recession!" Chris Senyek wrote in a Tuesday note.

— Sarah Min

Oppenheimer initiated coverage on GE Healthcare with an outperform rating, calling it an "attractive large-cap diagnostics & imaging play." Its price target of $97 per share implies shares rallying 20% from Monday's close. 

"GE Healthcare is the global leader in healthcare diagnostics, imaging, and intervention. GE's unparalleled depth and breadth of products in X-rays, CT, MRI, ultrasound, services, and digital solutions provide a unique ecosystem allowing multiple touch points along the continuum of care," analyst Suraj Kalia wrote in a Monday note. 

He added that "GE's recent spin-out provides a certain level of flexibility to undertake initiatives and chart its own destiny."

CNBC Pro subscribers can read more about the upgrade here.

— Hakyung Kim

Stocks opened lower on Tuesday.

The Dow Jones Industrial Average traded 127 points lower, or 0.4%. The S&P 500 fell 0.2% along with the Nasdaq Composite.

— Sarah Min

Warren Buffett's Berkshire Hathaway bought more Occidental Petroleum in the past few days, a new regulatory filing showed.

The conglomerate added $126 million to its Occidental stake on Thursday, Friday and Monday at an average price of $58.06 per share, the filing showed.

The "Oracle of Omaha" said earlier this month that Berkshire won't take full control of Occidental even though he kept adding to the bet. In August last year, Berkshire received regulatory approval to purchase as much as a 50%.

— Yun Li

Retail sales increased less than expected in April as a decline at gas stations hit the headline number, the Commerce Department reported Tuesday.

Spending rose 0.4% for the month, below the Dow Jones estimate for 0.8%. The numbers are not adjusted for inflation, so the monthly gain, combined with the 0.4% increase in the consumer price index, showed that spending just kept up with inflation pace.

Excluding auto-related components, sales rose 0.4%, in line with expectations. A 0.8% decrease in gas station sales held back the total, as did a 3.3% decline at sporting goods, musical and book stores. Miscellaneous stores and online sales led gainers.

—Jeff Cox

Check out some of the companies making headlines in premarket trading.

• Home Depot, Lowes — The home improvement retailers lost 3.5% and 2.8% in premarket trading on Tuesday, after Home Depot reporting the biggest revenue miss in over 20 years. The company reported revenue of $37.26 billion against a Refinitiv consensus forecast of $38.28 billion. Lowes will report quarterly results on May 23.
• Capital One — The firm gained 6.3% after a regulatory filing showed Warren Buffet's Berkshire took a new stake in the firm worth over $950 million.
• Nu Holdings — Nu Holdings popped 5.9% after the fintech firm topped analysts' first-quarter earnings expectations. Nu reported adjusted net income of $182.4 million, greater than the consensus estimate of $113.4 million, according to FactSet. It posted revenue of $1.6 billion, compared to analysts' forecasts of $1.40 billion.

Read the full list here.

— Brian Evans

Loop Capital advises investors maintain holdings in stocks that can outperform in an uncertain macroeconomic backdrop — and urged them to monitor ongoing debt ceiling negotiations.

"Simply put, we worry the stock market is not adequately pricing in the risk of a failure of the Democrats and Republicans to reach an agreement to raise the debt ceiling, which would be catastrophic for the US economy," Anthony Chukumba wrote in a Tuesday note.

— Sarah Min

Money transfer group Zepz is laying off 420 employees, the company told CNBC exclusively, as the fintech sector grapples with a tough macroeconomic environment.

The London-headquartered company began informing employees of the redundancies on Monday, with individual staff being told by their managers before larger communications were issued. By Tuesday, the whole company had been told about the move.

Zepz, which owns the WorldRemit and Sendwave brands, has a total headcount of around 1,600, meaning the cuts translate to about 26% of its workforce.

— Ryan Browne

This year's topsy-turvy stock market has rattled the nerves of investors, who are turning increasingly to cash as they sour on the prospects for economic growth, according to Bank of America's Global Fund Manager Survey for May.

Cash balances increased to 5.6% of portfolios for the professional investors who take part in the closely watched survey of market professionals. A net 65% of respondents said they expect a weaker economy ahead, the highest of 2023.

On the bright side, most investors see the economic damage as limited, with 63% in the "soft landing" camp. About one-third of respondents said they think the Federal Reserve still could raise interest rates higher.

—Jeff Cox

Investors concerned about a U.S. debt default should consider adding exposure to Japanese stocks, Charles Schwab chief global investment strategist Jeffrey Kleintop said Tuesday.

"A U.S. default would likely challenge the safe-haven status of the U.S. dollar and favor the yen, the other major safe-haven currency in the world," Kleintop told CNBC's "Worldwide Exchange." "A default might spur investors to seek protection in Japanese stocks and bonds."

The Nikkei 225, Japan's benchmark index, is up 14.4% year to date, outpacing the S&P 500's 7.7%.

— Fred Imbert

Shares of Home Depot fell more than 4% in the premarket after the home improvement retailer released its latest quarterly figures.

The company earned $3.82 per share, beating a Refinitiv forecast of $3.80 per share. Revenue for the fiscal first quarter, however, came in at $37.26 billion. That's below a consensus forecast of $38.28 billion. Additionally, Home Depot lowered its fiscal year guidance as consumers buy fewer big-ticket items and push back larger projects.

— Fred Imbert

The pan-European Euro Stoxx 600 index was down by 0.3% in early deals Tuesday.

Most major bourses and sectors were trading in negative territory. Only technology and utilities bucked the trend to push higher.

Minutes from the Reserve Bank of Australia showed that the central bank still sees rate hikes "may still be required," depending on how the economy and inflation in Australia evolve.

The RBA unexpectedly raised rates by 25 basis points in its last meeting on May 2 to 3.85%, defying market expectations.

The minutes reveal that the RBA's board members were considering between the 25 basis points hike and holding rates, but eventually decided on the rate hike.

This was because April data showed "the labor market remained tight and that inflationary pressures were significant," the board said.

"If these risks materialized, they would further delay the return of inflation to target, with the prospect of a damaging shift in inflation expectations," the minutes said.

While acknowledging "significant uncertainties" surrounding the economic outlook and particularly for household consumption, the RBA's board reiterated its commitment to price stability and the importance of ensuring that inflation expectations remain anchored.

— Lim Hui Jie

China's economic data for April widely missed expectations as the economy continued to show an uneven recovery path as it emerges from the impact of its stringent Covid restrictions.

Retail sales rose by 18.4% – falling below economists' forecast for a surge of 21%.

Industrial production for April was up 5.6% year-on-year, compared to the 10.9% expected by economists surveyed in a Reuters poll. The figure was up 3.9% in March following a muted start to the year.

Fixed asset investment rose by 4.7%, against expectations of 5.5%. Youth unemployment rate meanwhile hit a record high of 20.4%.

– Jihye Lee

Shares of Japanese financial stocks rose Tuesday morning after major banks forecast to hit record profits in the current financial year ended March 2024.

Mitsubishi UFJ Financial Group rose 2.6%, leading gains on the Topix as it forecasted a 16% jump in net profit to 1.3 trillion yen ($9.63 billion) for its current financial year, exceeding a previous record set in March 2021.

This comes even as the bank posted a 14.3% drop in full-year net profit to 1.12 trillion yen. This is the second straight year that MUFG's net profit exceeded the one trillion yen mark.

Mizuho Financial Group shares rose 1.14% as the bank recorded a 45.8% increase in revenue and a 4.7% increase in net profit.

In contrast, shares of Sumitomo Mitsui Financial Group slid 1.07%, even the company reported an increase in revenue of 49.4% year-on-year to hit 6.14 trillion Japanese yen, while net profit came in at 14% higher to reach 805.4 billion yen.

SMFG is forecasting a net profit of 820 billion yen for the current financial year.

— Lim Hui Jie

Stock futures were flat on Monday as investors turned their attention toward further negotiations between the Biden Administration and Congressional leaders.

Futures tied to the Dow Jones Industrial average slipped point, or less than 0.1%. Nasdaq futures lost 0.01% while S&P 500 futures were unchanged.

Biden and Congressional leaders will meet on Tuesday after earlier postponing a meeting from Friday. Treasury Secretary Janet Yellen said earlier on Monday that the U.S. could default on its debt obligations as easy as June 1.

— Brian Evans

Check out the companies making headlines in extended trading.

Capital One -- The firm added 5.5% after the closing bell. CNBC reported on Monday that Warren Buffet's Berkshire Hathaway took a new position in the company worth upwards of $950 million.

Ohmyhome Limited --The online real estate brokerage plummeted nearly 15% in after hours trading. The company said earlier on Monday that it planned to expand further into the Philippines market.

Dish Network -- Shares of the satellite TV provider added 3.4% in extended trading hours. The stock is down nearly 10% in the last five trading sessions, and has lost 53% from the start of the year.

— Brian Evans