Here are the key news, trends and analyzes that investors need to start their trading day:
1. Stock futures flat while investors await the key inflation report
Traders work on the floor of the New York Stock Exchange (NYSE) in New York on March 29, 2022.
Brendan McDermid | Reuters
Stock futures changed slightly Tuesday morning as Wall Street expected a major inflation report. A day earlier, all three major US stock indices withdrew as 10-year government bond yields reached a three-year high, reinforcing concerns about an economic downturn. The Dow Jones Industrial Average fell 413 points, or 1.19%, on Monday, while the S&P 500 fell 1.69%. The Nasdaq Composite – home to many growth stocks that are more sensitive to higher interest rates – fell 2.18%.
The technology-heavy Nasdaq has fallen by about 5.7% month to date. The S&P 500 has fallen 2.6%, while the blue chip Dow has fallen around 1.1%.
2. 10-year government interest rate reaches its highest level since December 2018
The 10-year US government bond traded at its highest point since December 2018 on Tuesday morning, reaching 2.82%, before retreating somewhat to 2.798%. The movement in bond yields comes ahead of the March consumer price index report, which the Labor Department is set to publish at 8:30 ET on Tuesday.
Government interest rates, which are reversing prices, have risen sharply in recent weeks. As recently as March 7, the 10-year US government bond yield was below 1.7%. However, interest rates have risen as the bond market prepares for more aggressive austerity measures from the Federal Reserve. In March, the US Federal Reserve raised interest rates for the first time in more than three years, and an even larger increase is expected at the May meeting.
March 3 The CPI is expected to show the warmest inflation since 1981
A person shopping for groceries at Lincoln Market on March 10, 2022 in the Prospect Lefferts Garden neighborhood in the Brooklyn borough of New York City.
Michael M. Santiago | Getty Images
The consumer price index for March is expected to show an increase of 8.4% on an annual basis according to Dow Jones estimates. That would be the biggest jump from year to year since December 1981. Economists also expect a monthly increase of 1.1%. In February, consumer prices rose 0.8% on a monthly basis and 7.9% over the past 12 months.
CPI, which tracks a wide range of goods and services, has been running at its hottest levels for decades for decades. The Fed’s political tightening is taking place in an attempt to dampen historically high inflation.
Higher food and rent costs are expected to be important contributors to the March inflation survey. However, energy prices will be particularly watched in Tuesday’s report. They are expected to show large increases due to the rise in oil prices in early March, which was related to the war between Russia and Ukraine.
4. US monitors allegations of possible Russian chemical attack in Ukraine
Pentagon Press Secretary John Kirby speaks at a Pentagon news briefing on April 11, 2022 in Arlington, Virginia.
Alex Wong | Getty Images
The United States is monitoring unconfirmed reports of a potential Russian chemical weapons attack in the Ukrainian port city of Mariupol, Pentagon spokesman John Kirby said Monday night. While Kirby indicated that the United States has not verified the accounts, he said they are “deeply concerned”. The unconfirmed reports “also reflect concerns that we have had about Russia’s potential to use a variety of means of insurgency control, including tear gas mixed with chemical agents, in Ukraine,” Kirby said in a statement.
British Foreign Secretary Liz Truss said Britain was working to verify the details of the possible attack, which was originally a telegram message sent by an ultranationalist part of the Ukrainian National Guard called the Azov Regiment. The announcement claimed that Russian forces were using “a toxic substance of unknown origin.”
5. Shanghai’s week-long lockdown facilitates for some residents
The metropolis of Shanghai, where many foreign companies are located, went into a two-part shutdown this week as municipal authorities tried to control an eruption in China’s worst Covid wave in two years.
Hector Retamal | Afp | Getty Images
Shanghai’s Covid lockdowns eased for some residents on Tuesday, more than two weeks after the strict public health protocols were introduced as coronavirus infections increased. Local media reported that nearly 5 million people live in parts of Shanghai where the restrictions are eased because no new cases were discovered in this area for at least two weeks. While these residents are able to leave their homes, Reuters reported that there was some confusion about how freely they could move.
Shanghai is China’s largest city, home to about 26 million people. Concerns about the humanitarian and economic consequences of the severe shutdowns have intensified in recent days. On Monday, the U.S. State Department asked all non-emergency personnel and their family members in Shanghai to leave the city.
– sign up now for CNBC Investing Club to follow Jim Cramers every single stock move. Follow the broader market action as a professional at CNBC Pro.