Check back for updates throughout the trading day
U.S. stocks were mixed in early Tuesday trading as investors looked to extend a five-week winning streak on Wall Street while focusing on a handful of key corporate earnings and a key inflation reading over the holiday-shortened four-day stretch.
Updated at 1:36 PM EDT
Auction slump
The Treasury's second benchmark auction of the day, a $70 billion sale of 5-year notes, drew weak foreign and domestic demand and pushed broader yields higher following a similarly weak 2-year sale earlier in the session.
Benchmark 10-year notes were last marked 8 basis points higher on the session at 4.532% while 2-year note yields rose 5 basis points to 4.972%
🇺🇸UGLY 2y and 5y UST auctions signal investors think the Fed may not be done with inflation:
— Althea Spinozzi (@Altheaspinozzi) May 28, 2024
-Both tailed by 1bp & 1.3bp respectively
-2y tenor saw the highest PD take since Dec, with indirects dropping to 57.9%
-The tail on the 5y is significant as notes sold off into the auct
Updated at 11:44 AM EDT
Auction slump
The Treasury sold $69 billion in new 2-year notes Tuesday, but saw a big slump in overall demand from both foreign and domestic demand for the record auction amid the market's renewed concerns over faster inflation.
Investors placed bids worth around $166.3 billion for the overall auction, generating a so-called bid-to-cover ratio of 2.41, well south of the 2.66 level tallied at last month's sale.
Indirect bidders, which are comprised largely of foreign central banks, took down 57.9% of the sale, down from 66.2% in April.
Not a great 2-year Treasury note auction overall. Small tail, lower demand than the last.
— Markets & Mayhem (@Mayhem4Markets) May 28, 2024
5-year note auction coming up next at 1:00 pm EST!
Auction details:
- High yield 4.917% vs 4.907% pre-sale WI (small tail)
- Sells $69 bln
- Awards 78.98% of bids at high
- Primary… pic.twitter.com/6HFQRmLsqP
Updated at 10:53 AM EDT
Don't bet on it
DraftKings (DKNG) shares slumped to a four-month low in early trading following a move by the Illinois state senate to pass a 2025 budget plan that includes heavy taxes on sports-betting websites.
The new levies, which could come into effect on July 1 if they're ultimately approved, would be based on annual revenue generation and apply to all US companies operation in the state and could rise to as high as 40% of gross recepits.
DraftKings shares were last marked 11% lower at $36.31 each, while rival Flutter Entertainment FLUT slumped 6.3% to $191.37 each.
Government making bookies great again 🤣
— Chris Perruna (@cperruna) May 28, 2024
"The Illinois Senate has approved a 2025 budget that imposes a 40% tax rate on operators with the highest AGR"$DKNG down as much as 12% this morning on the news.
Updated at 10:10 AM EDT
Growing confidence
The Conference Board's benchmark index of consumer confidence jumped 4.5 points to 102 in May, although it reading for near-term expectations continues to signal recession.
Stocks were little-changed following the data release, while 2-year Treasury note yields held at 4.925% ahead of a $69 billion sale of new notes later in the morning session.
Updated at 9:42 AM EDT
Modestly higher
The S&P 500 was marked 7 points, or 0.13% higher in the opening minutes of trading, with the Nasdaq rising to a fresh record high of 17,011 points.
The Dow was last marked 116 points lower, dragged down by Salesforce, Johnson & Johnson and UnitedHealth Group.
S&P 500 Opening Bell Heatmap (May 28, 2024)$SPY +0.19% 🟩$QQQ +0.35% 🟩$DJI -0.35% 🟥$IWM +0.66% 🟩 pic.twitter.com/AVA0mjDVfM
— Wall St Engine (@wallstengine) May 28, 2024
Updated at 8:48 AM EDT
Show Musk the money
Tesla (TSLA) shares edged lower in premarket trading, falling 1.14% to $177.12 each, following a weekend move by CEO Elon Musk to raise $6 billion for his new AI startup AI and a report from shareholder proxy service Glass Lewis that recommends voting against his long-delayed $55.8 billion pay deal
Related: Elon Musk's latest move could test Tesla shareholders as pay vote looms
Stock Market Today
Stocks continue to power through concerns linked to renewed inflation risks, with traders paring bets on autumn Federal Reserve interest rate hikes. A series of data releases last week underscored the resilience of the domestic economy.
The Atlanta Fed's GDPNow forecasting too suggests a current-quarter economic-growth rate of 3.5%, and weekly jobless claims showed the biggest two-week decline since last September.
Minneapolis Fed President Neel Kashkari, in fact, told CNBC Europe that all policy options for the central bank remain on the table. He cited the need for "many more months of positive inflation data."
"I'm not seeing the need to hurry and do rate cuts," Kashkari said "I think we should take the time and get it right."
Related: Fed rate cuts face big reset on renewed inflation risks
CME Group's FedWatch continues to suggest little to no chance of any move over the next two meetings, in June and July, with the odds of a September reduction now trading at just over 50%.
Two releases that could alter that forecast are expected this week, with the Commerce Department's second estimate of first-quarter GDP, expected on Thursday, May 30, and the Fed preferred inflation gauge, the PCE Price Index, due the following day.
The Core PCE reading is forecast to have eased modestly, to 0.2% in April from 0.3% in March, with the year-on-year reading slipping to 2.7%.
On Wall Street, stocks are again looking to brush past the bearish rate narratives to focus on the strength of the broader market, which has seen the S&P 500 print 24 record highs on its way to an 11.2% year-to-date advance.
Related: Costco earnings and inflation could rock markets this week
Around 10 S&P 500 companies are set to report first-quarter updates this week, including particularly Salesforce (CRM) and Costco (COST) . Markets are now expecting a second-quarter earnings-growth rate of around 10.9%.
Heading into the start of the trading day, futures contracts tied to the S&P 500 suggest an opening-bell gain of around 16 points, with the Dow Jones Industrial Average priced for a 20-point bump.
The tech-focused Nasdaq, meanwhile, is called 100 points higher thanks in part to a 2.4% gain for Apple (AAPL) tied to reports of a big surge in China iPhone shipments.
Meme stocks GameStop (GME) and AMC Entertainment (AMC) were back on the rise, as well, surging 19.5% and 5.6% respectively following a late Friday move by the videogame retailer to raise $933 million through the sale of new equity.
More Wall Street Analysts:
- Analyst unveils new Nike price target ahead of big summer for sports
- Analysts weigh in on Google-parent Alphabet’s stock after cloud event
- Analysts revamp Disney stock price target after proxy fight
In overseas markets, Europe's Stoxx 600 slipped 0.05% in early Frankfurt trading, with Britain's FTSE 100 falling 0.34% in London.
Overnight in Asia, Japan's Nikkei 225 closed 0.11% lower while the regionwide MSCI ex-Japan benchmark slipped 0.13% into the close of trading.
Related: Single Best Trade: Wall Street veteran picks Palantir stock
