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5 things to know before the stock market opens Friday, May 24

News Update – Pre-Markets

Here are the most important news items that investors need to start their trading day:

1. Down bad

Turns out Nvidia isn’t enough to lead the whole market. The Dow Jones Industrial Average had its worst session in more than a year on Thursday, falling more than 600 points, or 1.53%. The S&P 500, meanwhile, fell 0.74%, and the Nasdaq Composite tumbled 0.39%. That came despite chipmaker and AI darling Nvidia rising more than 9%. With a market cap of more than $2.5 trillion, it has considerable sway over the S&P 500, but the majority of the stocks in the broad market index turned negative, which could indicate a lack of market breadth. Follow live market updates.

2. ETherFs

An Ether cryptocurrency coin in seen in this photo illustration.

Jaap Arriens | Nurphoto | Getty Images

The Securities and Exchange Commission has enacted a rule change to allow the creation of ETFs that buy and hold ether. The exchange-traded funds would be similar to bitcoin ETFs, which launched less than six months ago after a separate SEC ruling. Bitcoin ETFs have proven to be popular, with net inflows already surpassing $12 billion, according to FactSet. Many of the same companies that sponsor bitcoin ETFs, including BlackRock, Bitwise and Galaxy Digital, are also hoping to launch ETFs for ether, one of the world’s biggest cryptocurrencies.

3. Live Nation, no more?

The logo and trading information for Live Nation Entertainment is displayed on a screen on the floor at the New York Stock Exchange (NYSE) in New York, U.S., May 3, 2019. 

Brendan Mcdermid | Reuters

The show may soon be over for Live Nation. The U.S. Department of Justice is suing to break up the entertainment company — the parent company of Ticketmaster — over alleged antitrust violations. Thirty states have joined the DOJ in the suit, which comes after the department’s investigation into whether Live Nation is a monopoly in the ticketing industry. Attorney General Merrick Garland said in a statement that Live Nation “relies on unlawful, anticompetitive conduct to exercise its monopolistic control over the live events industry in the United States at the cost of fans, artists, smaller promoters, and venue operators.” Live Nation called those allegations absurd. Shares of the stock closed down more than 7% on Thursday following the news.

4. Relief ahead

Commuters sit in traffic on southbound Interstate 5 during the afternoon commute heading into downtown San Diego on March 12, 2024 in San Diego, California. 

Kevin Carter | Getty Images

The rapid increase of auto insurance costs may actually be slowing down. While the category increased 1.8% in April on a monthly basis and was up 22.6% from the period a year ago — the largest annual increase since 1979 — Bank of America sees some signs of easing. BofA economist Stephen Juneau said in a note that higher motor vehicle insurance premiums were due to “underwriting losses in the industry.” Since there are “signs that many insurers are getting back to profitability,” he and the firm believe that the rate of increase for premiums should slow. What’s more, auto insurance has been a key driver of inflation, so if BofA’s forecast is accurate, it could mean the Fed will gain more confidence to cut rates later in the year.

5. Cash burn

The exterior of the Boeing Company headquarters is seen on March 25, 2024 in Arlington, Virginia.

Kevin Dietsch | Getty Images

Fasten your seatbelts, Boeing. The company’s CFO, Brian West, said on Thursday that it’ll burn through cash in 2024 and that new plane deliveries won’t improve in the second quarter of the year compared to the first. West had previously forecast a month ago that Boeing would generate free cash flow “in the low single-digit billions.” The company already blew through nearly $4 billion in cash in the first quarter this year, and West thinks that the number for the second quarter could even be “a little worse.” But he said the turbulence won’t last forever, and that Boeing would likely begin generating cash again in the second half of the year. Shares dropped 7% in afternoon trading after the CFO’s comments.

— CNBC’s Hakyung Kim, Jesse Pound, Tanaya Macheel, Ece Yildirim, Sarah Whitten, Jeff Cox and Leslie Josephs contributed to this report.

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