Here are the most important news, trends and analysis that investors need to start their trading day:
- Stock futures jump as two Dow stocks move in opposite directions
- Walmart falls on mixed results, hit by spiking price pressures
- Home Depot rises after strong results that weathered inflation
- Musk says Twitter deal 'cannot move forward' until he gets clarity on bots
- Buffett's Berkshire buys a slew of new stocks in the first quarter
1. Stock futures jump as two Dow stocks move in opposite directions
U.S. stock futures rallied Tuesday, with the S&P 500 and the Nasdaq set to open up roughly 1.5% and nearly 2%, respectively. The Dow Jones Industrial Average looked ready to open nearly 350 points, or more than 1%, higher.
- That's despite a nearly 6% premarket decline in Dow component Walmart after mixed quarterly results due to rising costs.
- A different story at Home Depot, which weathered inflation. The Dow stock rose 3.5% in the premarket after stronger quarterly results.
- United Airlines rose 4% in Tuesday's premarket, the morning after raising its current quarter revenue forecast, expecting its busiest summer since before the Covid pandemic began.
- In a choppy session Monday, following multiweek losing streaks, the Dow rose slightly and the S&P 500 fell slightly. The Nasdaq lost 1.2%.
The 30-year Treasury yield ticked higher Tuesday to around 2.95% after the government's before-the-bell release showed a slightly less-than-expected increase of 0.9% in April retail sales month over month. On a year over year basis, retail sales rose 8.2%. The March numbers were revised sharply higher. Investors are hoping to learn from all the retail numbers how consumer are reacting to rampant price pressures — and in turn, whether the Federal Reserve might need to dial up interest rate hikes to fight inflation.
2. Walmart fell on mixed results, hit by spiking price pressures
Walmart on Tuesday reported first-quarter earnings that missed expectations by a wide margin. The nation's largest grocer and retailer felt pressure from rising costs of food and fuel. Revenue for the quarter beat estimates. That mixed picture carried over to Walmart's guidance, raising its outlook for sales this year but lowering profit expectations. Chief Financial Officer Brett Biggs told CNBC that Walmart employees returning from Covid leave more quickly than expected caused the company to become overstaffed.
3. Home Depot rose after strong results that weathered inflation
Despite spiking inflation, consumers were still willing to spend money on their homes, and Home Depot does not expect the trend to reverse. The company on Tuesday reported better-than-expected earnings and revenue for the first quarter. Home Depot raised its full-year outlook, now expecting sales to increase about 3% and earnings per share growth in the mid single digits on a percentage basis. The Q1 results mark new CEO Ted Decker's first quarter at the helm.
4. Musk says Twitter deal 'cannot move forward' until he gets clarity on bots
Elon Musk said his $44 billion purchase of Twitter will not move ahead until he has more clarity on how many accounts are fake. Twitter estimated in a filing earlier this month that number was at fewer than 5% in the first quarter. But Musk, CEO of Tesla and SpaceX, estimates bots at around 20% and fears that could be higher. Twitter shares dropped 1% in Tuesday's premarket. The stock erased all the gains made since Musk disclosed his investment in the social network on April 4, and it's nowhere near his takeover offer of $54.20 per share.
5. Buffett's Berkshire buys a slew of new stocks in the first quarter
Warren Buffett's Berkshire Hathaway made a few changes to its equity portfolio in the first quarter, including adding a big stake in Citigroup, according to a regulatory filing. Berkshire also added Paramount Global. Shares of Citigroup and Paramount soared 5% and nearly 10% in the premarket, respectively. The conglomerate exited Wells Fargo. It was previously revealed that Berkshire added Chevron and ramped up its Occidental Petroleum investment. Buffett told CNBC's Becky Quick earlier this month that he scooped up $600 million worth of Apple shares following a three-day decline in the stock last quarter.