5 things to know before the stock market opens on Wednesday June 15

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

U.S. stock futures rose on Wednesday as Wall Street braces for what could be an even more aggressive Federal Reserve interest rate hike than the market expected a few days ago. sadness. After last week’s higher than expected consumer inflation data, investors and the Fed will see how these higher prices have affected buyers. May retail sales unexpectedly fell 0.3%, after a downwardly revised 0.7% increase in April. After the data, the 10-year Treasury yield fell from 2011 highs, trading around 3.38% on Wednesday.

The Dow Jones Industrial Average and the S&P 500 both fell for five consecutive sessions on Tuesday. The Nasdaq rose modestly, breaking a four-day losing streak. Shares hit session lows in the past hour of trading after swinging between significant gains and losses throughout the day. The Dow Jones closed down more than 17% from its record highs in January, still in a sharp correction. Both the S&P 500 and the Nasdaq remained in bear markets, with the former down more than 22% from its January high and the latter down about 33% from the all-time high in November.

Fed policymakers are eyeing a 75 basis point interest rate hike as they wrap up their two-day June meeting on Wednesday. That’s what the markets are now expecting after everyone up until this week was pretty much counting on another 50 basis point rise. The rate decision is scheduled for 2 p.m. ET, with Fed Chairman Jerome Powell’s usual press conference 30 minutes later. The persistence of high inflation has further increased the urgency to stop the price spiral. However, a more aggressive tightening by the Fed comes with the risk of tipping the economy into a recession. This is the dilemma that agitates the markets.

The European Central Bank announced on Wednesday its intention to create a new tool to combat the risk of fragmentation in the euro zone. The move comes after EBC’s emergency monetary policy meeting to deal with soaring bond yields in recent days for many governments across the continent. Wednesday’s ECB meeting took place hours before the Fed’s rate decision.

The total volume of mortgage applications fell to half of what it was last year, according to the latest seasonally adjusted index from the Mortgage Bankers Association. The sharp rise in interest rates is decimating refinancing volume and these rates, along with exorbitant home prices and a shortage of homes for sale, are hitting demand from potential buyers. Last week, the average 30-year fixed rate mortgage rose to 5.65%. And now this week, the 30-year mortgage hit 6.28% on Tuesday, according to a daily gauge from Mortgage News Daily. After reaching record lows around 2.7% at the end of 2020, it started 2022 at 3.29%.

Bitcoin fell to a new 18-month low on Wednesday, causing crypto markets to fall sharply triggered by crypto lender Celsius freezing customer withdrawals. The largest cryptocurrency in the world has fallen to less than $21,000, its lowest since December 2020. Bitcoin has lost about 28% since Friday and more than half of its value this year. Since its all-time high above $68,000 in November, it has fallen about 70%. Expectations of steeper Fed rate hikes to fight inflation have also increased pressure on risky assets, from cryptocurrencies to equities.

President Joe Biden on Wednesday called on U.S. oil refining companies to produce more of their products, saying they must help ease the burden of high prices on consumers. “In wartime, historically high refinery profit margins passed directly to American families are not acceptable,” the president said in a letter to oil companies, including Exxon and Chevron. Biden calls for “immediate actions to increase the supply of gasoline, diesel and other refined products.” The president’s letter comes as sky-high energy costs add to inflationary concerns across the economy, with average gasoline prices nationwide exceeding $5 a gallon.

CNBC Yun Li, Samantha Subin, Sarah Min, Silvia Amaro, Elliot Smith and pippa stevens as well as Reuters contributed to this report.

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