Here are the most important news items that investors need to start their trading day:
1. Sour start
Markets are opening the second quarter on a rough note. Bond yields are rising and traders have lower expectations that the Federal Reserve will cut interest rates in June, bringing markets down. The 30-stock Dow dropped nearly 400 points on Tuesday for its second straight losing session. The S&P 500 fell 0.7%, while the Nasdaq Composite tumbled nearly 1%. Investors will be watching the ADP private payrolls report released Wednesday ahead of March jobs data on Friday. Follow live market updates.
2. It’s Disney day
Activist investor Nelson Peltz’s big fight against Disney comes to a head as shareholders will vote Wednesday on the company’s board. Voters are deciding if the board deserves another year together, or if candidates nominated by activist investors, including Trian Partners’ Peltz, should replace certain directors. Among other issues, Trian has said the company failed to generate significant returns and that Disney’s board and CEO Bob Iger have struggled with succession plans. Both sides have received support from influential shareholders ahead of Wednesday’s meeting, which is set to start at 1 p.m. ET, although Disney is reportedly leading the way in voting, according to Reuters and Bloomberg.
3. Tesla tumbles
Tesla saw its first year-over-year decline in deliveries since 2020, when operations were disrupted by the pandemic. The electric vehicle company on Tuesday reported first-quarter vehicle deliveries of 386,810, a drop of 8.5% from a year ago. Analysts were expecting deliveries of about 457,000 for the period, according to a mean of 11 estimates compiled by FactSet. The company faced numerous challenges in the first quarter, including disruptions at a German factory outside of Berlin. Tesla shares fell nearly 5% in trading Tuesday.
4. Feeling the pinch
Shares of major U.S. health insurers fell sharply Tuesday after the Biden administration announced payments for private Medicare plans that disappointed the insurance industry and investors. They had hoped to see a bigger boost in such payments, and the decision puts more pressure on the companies as they deal with high medical costs. Humana, which is more dependent on those Medicare Advantage plans than its rivals, saw its stock sink 13% Tuesday. Shares of CVS Health fell more than 7% on Tuesday, while UnitedHealth Group’s stock slid nearly 7%.
5. Crude oil
Oil prices hit their highest level since October on Tuesday amid heightened geopolitical risk and robust economic data. U.S. crude oil, the West Texas Intermediate contract for May delivery, gained $1.44, or 1.72%, to settle at $85.15 a barrel. The Brent contract for June delivery, which is the global benchmark, added $1.53, or 1.75%, to $88.94 a barrel. Investors have been monitoring an escalating conflict in the Middle East that could threaten supply and a Ukrainian drone strike on a major Russian oil refinery.
— CNBC’s Sarah Min, Alex Sherman, Rohan Goswami, Lora Kolodny, Annika Kim Constantino and Sam Meredith contributed to this report.
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