5 things to know before the stock market opens on Wednesday, May 18th

Here are the most important news, trends and analysis that investors need to start their trading day:

U.S. stock futures fell on Wednesday as rising inflation hit another retailer. Target fell 24% in the premarket, shortly after a big profit miss. A similar pattern of profits at Walmart was revealed on Tuesday. Shares of Dow closed nearly 11.4% in the worst decline in a single session since 1987. Shares of Walmart lost another 1.7% at the premarket on Wednesday. One of the factors driving rising inflation is energy spending. U.S. oil prices on Wednesday jumped 2.5% and again exceeded $ 115 a barrel.

Despite Walmart’s problems, the Dow Jones Industrial Average rose 431 points or 1.3% on Tuesday. The S&P 500 and Nasdaq rose 2% and nearly 2.8% respectively in the last attempt by Wall Street to recover after weeks of sharp losses. The Nasdaq was still in a bear market, driven by a 20% drop or more from the previous high. The Dow and S&P 500 were still in correction, driven by a 10% decline or more from previous highs.

The fall in shares of Target came after the retailer on Wednesday morning reported adjusted earnings in the first quarter, which significantly exceeded estimates. The company’s profits were hampered by expensive transportation costs, higher mark-ups and lower-than-expected sales of goods at discretion from TVs to bicycles. Like Walmart on Tuesday, which also cited inflation and increased pressure on stocks, Target’s revenue exceeded estimates. Target reiterated its sales forecast, which assumes average unambiguous interest growth this year and beyond.

Contrary to the strong quarter and Home Depot recommendations the day before, rival Lowe on Wednesday morning brought in first-quarter revenue that did not live up to expectations. In the premarket, Lowe shares fell 4%. The company saw that cooler spring weather damaged the demand for materials for DIY projects. Home Depot held on as professional sales outpaced DIY. Lowe’s, which receives 75% to 80% of total sales from DIY customers, really beat profits. The company reiterated its full-year sales forecast of $ 97 billion to $ 99 billion.

The government launched housing construction in April, and a report on building permits showed a decline in construction activity. The start of housing construction last month was 1.72 million on an annualized basis with seasonal adjustments. It was below estimates. Building permits in April met expectations of 1.82 million a year.

• Weekly demand for mortgages from home buyers fell 12% as higher rates took their toll. It was the first weekly drop in about a month. Inflation also doesn’t help consumers feel particularly flushed. Refinancing applications continued to decline by 10% for the week.

Following these data, the yield on 10-year Treasury bonds rose on Wednesday by about 3%. The constant strength of the benchmark’s profitability can be attributed to the comments of the chairman of the Federal Reserve Jerome Powell. In an interview with the Wall Street Journal on Tuesday, Powell said the central bank will without hesitation continue to raise interest rates until inflation falls.

Jamie Diman of JPMorgan Chase received a rare reprimand on Tuesday when shareholders disagreed with his $ 52.6 million withholding bonus. Only 31% of investors who attended JPMorgan’s annual shareholders’ meeting supported the award, which was part of the chairman’s and CEO’s compensation package for 2021 and is intended to keep him at the helm for another five years. Although voting is not mandatory, the JPMorgan board said it takes investor feedback “seriously” and believes the Daimon bonus will be one-time.

– CNBC Sarah Min, Pippa Stevens, Melissa Repko and Hugh Son contributed to this report.

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