Here are the most important news items that investors need to start their trading day:
1. Tech pullback
Stocks fell for a second straight day Tuesday, as several big tech companies dragged the market further away from recent record highs. The Nasdaq Composite slid 1.65%, the Dow Jones Industrial Average dipped 1.04% and the S&P 500 fell 1.02%. Apple was down almost 3% after a report said iPhone sales plunged in China in the first six weeks of the year. Other mega-cap stocks also fell, including Tesla, which lost nearly 4%, and Netflix and Microsoft, which both slid about 3%. Follow live market updates here.
2. Powell on the Hill
Federal Reserve Chairman Jerome Powell will be on Capitol Hill today to begin two days of congressionally mandated testimony. Powell will appear before the House on Wednesday and the Senate on Thursday as markets are intent on getting more information about how the Fed plans to proceed with monetary policy in the coming months. Investors expect the Fed will start cutting interest rates in June and enact the equivalent of four quarter-percentage-point cuts this year, according to futures market pricing from the CME Group. Recently, Powell has said it is too early to ease up on monetary policy, while also expressing satisfaction with the trend in prices.
3. Striking guidance
CrowdStrike shares soared nearly 25% in premarket trading after the cybersecurity company reported better than expected earnings Tuesday and issued strong guidance for the upcoming quarter and full year. The company has reported GAAP net income for the past four quarters, and full-year revenue climbed 36% year over year in the period that ended Jan. 31. Continuing its merger and acquisition activity, CrowdStrike also announced Tuesday that it would acquire Flow Security in a cash-and-stock deal at an undisclosed price.
4. Hitting back
OpenAI responded Tuesday to Elon Musk's lawsuit by highlighting apparent hypocrisy on the part of the co-founder and early backer of the company. OpenAI published old emails that showed Musk encouraged the company to raise at least $1 billion in funding and agreed that it should "start being less open" over time and "not share" the company's science with the public. The emails were in stark contrast to Musk's lawsuit against OpenAI and CEO Sam Altman alleging breach of contract and unfair competition. The suit alleged that the inner working of OpenAI's GPT-4 AI model are "a complete secret except to OpenAI—and, on information and belief, Microsoft," and that the secrecy is caused by commercial purpose instead of safety. OpenAI said it intends to move to dismiss Musk's claims.
5. Muted outlook
Nordstrom shares slid about 10% in premarket trading after the retailer reported a holiday-quarter sales beat Tuesday but gave a muted outlook for the year ahead. The company forecast full-year revenue will range from a 2% decline to a 1% gain compared with the prior year. As consumers become more price-conscious while they deal with higher interest rates and inflation, the Seattle-based company has reported lagging sales at its off-price retailer, Nordstrom Rack, and has had too much of the wrong inventory.
— CNBC's Alex Harring, Hakyung Kim, Jeff Cox, Rohan Goswami, Hayden Field, Lora Kolodny and Melissa Repko contributed to this report.
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