Here are the top news, trends, and analysis investors need to start their trading day:
1. Stocks fall after the Fed-led Wall Street decline
Dow futures fell more than 100 points on Thursday, a day after the 30-stock average closed 265 points, or nearly 0.8%, as the Federal Reserve raised its rate hike schedule. The Dow was down 382 points on Wednesday afternoon during Fed Chairman Jerome Powell’s news conference that began at 2 p.m. ET 30 minutes after the central bank’s political statement and forecasts were released. Like the Dow, the S&P 500 and Nasdaq hit their daily lows around the same time. But their lower closings were less strict. The S&P 500 and Nasdaq were less than 1% off Monday’s record high. The Dow was more than 2% off its previous record high in early May.
Traders on the floor of the New York Stock Exchange.
2. Central bankers indicate two rate hikes for 2023, no QE change
The Fed left rates unchanged on Wednesday and made no mention of adjusting its massive quantitative easing program to buy Covid-era bonds. Looking ahead, central bankers announced two rate hikes for 2023. In March, they hadn’t expected any rate hikes until at least 2024. The Fed also raised its inflation expectation to 3.4% on Wednesday, a whole percentage point above the March forecast. The political statement following Wednesday’s session went on to say that inflationary pressures were “temporary”, although recent data on wholesale and consumer prices showed that inflation has not reached the pace it has seen in more than a decade. The 10-year government bond yield ticked higher and lower Thursday morning, trading 1.57% on both sides. It was just under 1.5% just before the Fed’s announcements.
3. Powell tells Jobs that inflation targets come a little faster
Federal Reserve Chairman Jerome Powell
Kevin Lamarque | Reuters
Powell said that progress toward the Fed’s dual employment and inflation targets was slightly faster than expected. Central bankers have raised their GDP expectations for this year from 6.5% previously to 7%. Their estimate of the unemployment rate remained unchanged at 4.5%. The Department of Labor took a step back from the Covid-era lows on Thursday morning, reporting that initial jobless claims rose to 412,000 last week. Economists had expected 360,000. Two weeks ago, new applications for unemployment benefit went below 400,000 for the first time since March 2020.
4. 11 Republican Senators support bipartisan infrastructure plan
Senator Mitt Romney, a Republican from Utah, arrives for lunch on Capitol Hill in Washington, DC on Wednesday, June 16, 2021.
Sarah Silberner | Bloomberg | Getty Images
A bipartisan senatorial group working on a $ 1 trillion infrastructure compromise has more than doubled to 21 members, a key threshold that gives momentum to its push as President Joe Biden comes at a crucial time for his huge overseas legislative priority returns. Eleven Republican senators joined the effort. In the equally divided Senate, the conservative West Virginia Democrat Joe Manchin, who supports the bipartisan measure, has stressed that he wants to pass a package with GOP votes. Biden wants a bigger bill, more like he suggested in his $ 1.7 billion American job plan. Biden left Geneva after meeting with Russian President Vladimir Putin on Wednesday, saying he has not seen the bipartisan law, but his chief of staff believes there is “some room” for a deal with the Republicans.
5. CureVac fuels almost 50% after disappointing Covid vaccine data
A volunteer receives a dose of CureVac vaccine or a placebo during a study by the German biotech company CureVac as part of a test for a new vaccine against coronavirus disease (COVID-19) in Brussels on March 2, 2021.
Yves Herman | Reuters
CureVac shares plunged nearly 50% in the US premarket on Thursday, the morning after the German biopharmaceutical company released disappointing preliminary results for its Covid vaccine candidate. It showed a preliminary effectiveness of 47% against “any severity” disease, missed the main target and challenged the potential delivery of hundreds of millions of doses to the European Union. While late studies were conducted with the more than 90% effective Pfizer BioNTech and Moderna vaccines when the original version of the coronavirus prevailed, real data so far only indicated slightly weaker protection against the new variants.
– Associated Press and Reuters contributed to this report. Follow all market activity like a pro on CNBC Pro. Get the latest on the pandemic with coronavirus coverage from CNBC.