5 things to know before the stock market opens Friday, May 13

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

1. Dow futures pop after losing six-session streak from the 30-stock average

The Twitter logo and trading information are displayed while a trader works on the floor of the New York Stock Exchange (NYSE) in New York City, US, May 3, 2022.

Brendan Mcdermid | Reuters

US stock futures bounced Friday, with the S&P 500 trying not to join the Nasdaq in a bear market defined by a drop of 20% or more from a previous high.

  • Nasdaq futures led the way higher despite a 12% premarket drop in Twitter stock. The stock fell as much as 25% after Elon Musk tweeted Friday that his deal to buy the social network has been “temporarily put on hold”. Twitter shares were wiping out those losses when Musk later tweeted that he is “still committed” to the deal.
  • The Dow Jones Industrial Average fell for its sixth consecutive session on Thursday, falling further into a correction defined by a fall of 10% or more from an earlier high. The S&P 500 fell slightly. The Nasdaq posted a slight gain.

2. Bond yields rose after Powell says he can’t guarantee a soft landing

10-year government bond yields ticked higher on Friday but remained below 3%, a key level that was surpassed on May 2 for the first time since late 2018.

  • Bond yields have risen rapidly in the belief that the Federal Reserve will have to be more aggressive in raising interest rates to fight inflation. There is concern that inflation will remain high even if the economy slows.
  • Fed Chair Jerome Powell said in an interview posted to Marketplace on Thursday that he cannot promise a so-called soft landing for the economy. He warned that getting inflation under control could cause some economic pain, but this remains his top priority.

3. Two tweets from Elon Musk about his Twitter deal went public

With two tweets Friday morning, Musk sent Twitter stocks on a wild ride. After saying he had cut his offer on Twitter to get more information about the number of fake accounts on the social media platform, he later said he was “still committed to the takeover.” The first tweet came at 5:44 a.m. ET. The second tweet was posted about two hours later.

Tesla CEO Musk announced last month that he plans to buy Twitter for $44 billion and has previously tweeted that one of his top priorities would be to remove “spam bots” from the platform. Tesla shares, which recently fell on concerns that Musk’s Twitter deal would be a distraction, rose more than 5% on the first tweet Friday and held that gain after the second.

4. Some stablecoins gain a foothold, driving the crypto market higher

Tether has long been faced with the question of whether it has enough assets to justify its peg to the dollar.

Tiffany Hagler | Bloomberg via Getty Images

Tether, the world’s largest stablecoin, regained its peg to the dollar after more than $3 billion worth of tokens left the system in a single day. The cryptocurrency — which should always be worth $1 — dropped as low as 95 cents on Thursday. A controversial stablecoin known as TerraUSD or UST, believed to be pegged 1-to-1 to the dollar, has collapsed in recent days, trading around 8 cents on Friday. Luna, a token closely associated with UST, is now worth $0 as a result.

  • The stablecoin saga has added a layer of uncertainty that has contributed to sharp declines across the crypto market. Bitcoin was back above $30,000 on Friday, bouncing back from levels not seen since late 2020. At current levels, bitcoin, the world’s largest cryptocurrency, fell more than 50% from its all-time high of more than $68,000 in November.

5. CEO of a major crypto exchange takes a large stake in Robinhood

Sam Bankman-Fried, CEO of FTX US Derivatives, testifies at the House Agriculture Committee hearing titled Changing Market Roles: The FTX Proposal and Trends in New Clearinghouse Models, at Longworth Building on Thursday, May 12, 2022.

Tom Williams | CQ Roll Call, Inc. † Getty Images

  • Shares of Robinhood, a popular stock and crypto trading platform, rose more than 23% in Friday’s premarket. In Thursday’s regular trading, the stock reached an all-time low. Robinhood ended the session with a price of $8.56, about 77% off last July’s IPO price.
  • The document states that Bankman-Fried does not intend to “take any action to alter or influence its control over the company.” The filing also said it may “enter into talks” with management from time to time.

— CNBCs Jesse PondVicky McKeeverJeff CoxSam Shead and Tanaya Macheel contributed to this report.

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