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5 things to know before the stock market opens on Wednesday, May 25

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

1. Nasdaq futures slide, a day after the tech heavyweight index fell more than 2%

Traders on the NYSE floor, May 23, 2022.

Source: NYSE

US stock futures falls on Wednesday, the day after Nasdaq down 2.4% like SnapThe 43% slide on profit warnings dragged many other tech stocks lower. Tuesday’s Nasdaq bear market just shy 30% down from the most recent high. The S&P 500 fell 0.8%, breaking a two-session winning streak, but staying above a bear market drop of 20% or more from previous highs. The Dow posted a small gain in the third active session in a row. But the 30-stock average remains in a steep correction defined by a 10% or more drop from the most recent high.

2. Investors seek safety in bonds minutes before the Fed’s May meeting

Federal Reserve Chairman Jerome Powell speaks at a news conference after the Federal Open Market Committee meeting on May 4, 2022 in Washington, DC. Powell announced that the Federal Reserve is raising interest rates by half a percentage point to combat record-high inflation.

Win Mcnamee | beautiful pictures

Bond price ended up being the recipient of the stock sell-off. The 10-year Treasury yieldmoved inversely with the price, dropping to around 2.7% on Wednesday, before the afternoon release of minutes from Federal ReservePolicy meeting in May. Investors hope to glean more insight into the central bank’s thinking on inflation and the economy. Earlier this month, the Fed raised interest rates by 50 basis points, double the rate increase in March.

3. Rising mortgage interest rates continue to reduce demand for home loans

A sign for sale of a house is painted in Alhambra, California on May 4, 2022.

Frederic J. Brown | AFP | beautiful pictures

Even as the 10-year yield recently hit a late-2018 peak above 3%, it is more than double the December low, sending mortgage rates higher and demand for home loans cools down. Home applications were flat week-on-week and down 16% from a year ago. Mortgage demand from homebuyers is now close to the lows seen in spring 2020, at the start Covid pandemic just before frantic demand pushed prices higher at an astonishing rate over the past two years. Last week, applications to refinance a home loan fell 2% and were 75% lower than in the same period a year ago.

4. Dick plunges, Nordstrom rises after very different quarters, outlook

Cars were seen parked in front of the Dick’s Sporting Goods store at Monroe Marketplace in Pennsylvania.

Paul Weaver | SOPA images | LightRocket | beautiful pictures

Dick’s sportswear shares fell more than 11% in the money market on Wednesday, shortly after cut its financial forecast for the entire financial year, citing sky-high inflation and ongoing supply chain challenges. Dick’s decision to reduce guidance comes after similar adjustments from Walmart, Target and Kohl’s. The sporting goods chain beat expectations for quarterly earnings and revenue as shoppers spent money on golf clubs, soccer equipment and athletic apparel.

A shopper leaves a Nordstrom store on May 26, 2021 in Chicago, Illinois.

Scott Olson | beautiful pictures

Contrary to the inflation troubles at other retailers, Nordstrom up nearly 6% in pre-market trading, despite falling to an overnight high. Upscale department store chain after Tuesday’s closing bell raised its annual revenue and profit forecast. While posting a slightly larger-than-expected loss for its first fiscal quarter, Nordstrom saw sales jump 18.7 percent and exceed pre-pandemic levels as shoppers looking to refresh their wardrobe with designer brands and shoes.

5. Wendy’s largest shareholder promotes fast food chain deal

The logo of the Wendy’s restaurant is seen in Plano, Texas, on July 2, 2020.

Dan Dien | Xinhua News Agency via Getty Images

Wendy’s the stock rose about 9% in money markets after it was known late Tuesday in a filing that the fast food chain’s largest shareholder, Trian Partners, are exploring a potential deal for company. Trian, founded and operated by Nelson Peltz, which first invested in Wendy’s in 2005. The hedge fund currently owns a 19.4% stake in Wendy’s. Trian holds three board seats at the fast food company, including one chaired by Peltz, the chairman. Trian said it had previously urged Wendy’s to reduce restaurant costs, improve operations and build its brand.

– by CNBC Peter Schacknow, Diana Olick, Lauren Thomas and Sara Salinas contributed to this report.

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