Link exchange

5 things to know before the stock market opens Tuesday, June 14

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

1. Wall Street expected to rise after the S&P 500 officially closes in the bear market

Traders on the floor of the NYSE, June 13, 2022.

Source: NYSE

US stock futures rebounded from Tuesday’s cooler inflation report and what could be an even more aggressive Federal Reserve interest rate hike on Wednesday. The S&P 500 officially closed Monday in bearish territory, defined as a decline of 20% or more from its previous high, which was in January. The broad stock index also hit a new low for the year.

  • Monday’s strong selloff saw the S&P 500 lose 3.9% and the Nasdaq – already in a bear market since March – tumble 4.7%. The Dow sank 876 points or 2.8%. The 30-stock average fell again in a correction, down 17% from its January high. A correction is defined as a decline of 10% or more from a previous high. All three stock indexes fell for four consecutive sessions.

2. Yield on 10-year Treasuries retreats from 2011 highs after cooler inflation data

3. The Fed begins a two-day meeting and markets now expect a 0.75% rate hike

US Federal Reserve Chairman Jerome Powell discusses interest rate hikes during a press conference in Washington, DC on May 4, 2022.

Xinhua/Getty News Agency

Markets expect the Fed to hike rates 0.75% after its two-day policy meeting in June on Wednesday. Only the size of the rate hike is in question, as Fed Chairman Jerome Powell has repeatedly said that 0.5% hikes in June and July seem appropriate.

  • After the Fed’s May meeting, which saw rates rise 0.5%, Powell took a 0.75% hike off the table.
  • But a lot has changed since then with equity markets selling off and bond yields soaring, as well as another recession signaling a reversal in 2-year and 10-year yields.
  • Markets fear that the Fed will have to tighten the economy much more to fight inflation and that this could lead to a recession.

4. Coinbase will lay off 18% of full-time jobs; bitcoin plunges again

Coinbase saw a 27% decline in revenue in the first quarter as usage of the platform plummeted.

Chesnot | Getty Images

Crypto exchange Coinbase will cut 18% of full-time jobs, according to an email sent to employees on Tuesday. CEO Brian Armstrong pointed to a possible recession, the need to manage costs and growing “too fast” during a bull market. Coinbase shares fell 7% pre-market after closing down 11.4% on Monday. Ahead of Tuesday’s premarket drop, the stock is down 79% year-to-date as bitcoin and the broader crypto market sold off in 2022.

  • Bitcoin briefly fell below $21,000 overnight in Asia before rebounding slightly. Crypto assets were hammered on Monday as concerns mounted over lending platform Celsius and crypto exchange Binance briefly suspending withdrawals. Bitcoin, which trades around $22,000 early Tuesday, has fallen about 68% from its all-time high in November.

5. Oracle soars as database software giant beats on profit and revenue

A sign is displayed in front of Oracle’s corporate headquarters on June 13, 2022 in Redwood Shores, California.

Justin Sullivan | Getty Images

Oracle shares jumped 11% in Tuesday’s premarket, the morning after the database software company reported fiscal fourth-quarter results and revenue that beat estimates. Revenue rose 5% to $11.84 billion from a year earlier, driven by growth in the company’s cloud infrastructure business, which competes with Amazon Web Services and Microsoft Azure .

  • Oracle CEO Safra Catz said in a statement, “We believe this spike in revenue growth indicates that our infrastructure business has now entered a phase of hyper-growth.” Oracle’s earnings pace is particularly important as investors focus on companies that can generate profitability and cash flow during a downturn. Prior to the after-hours jump, Oracle shares were down 27% for the year.

—CNBC Sarah Min, Samantha Subin, Fred Imbert, Jeff Cox, Abigail Ng, Kate Rooney and Ari Levy contributed to this report.

Register now for the CNBC Investing Club to follow Jim Cramer’s every stock market move. Follow the evolution of the market like a pro on CNBC Pro.