5 things to know before the Wednesday open: Broken win streak Sliding Gucci sales

CNBC

2 days ago

It was fun while it lasted. The S&P 500 snapped a six-day streak of finishing at all-time closing highs on Tuesday. Stocks that received the meme treatment last week were among the names taking a leg down. Opendoor Technologies tumbled more than 12%, while GoPro and Krispy Kreme both slid more than 8%. Stock futures are little changed Wednesday morning ahead of an action-packed day.
Fed day is here. The U.S. Federal Reserve is slated to provide its latest interest rate decision at 2 p.m. However, it seems like the writing's on the wall: Fed funds futures are pricing in a nearly 98% likelihood of the central bank holding steady, according to the CME FedWatch tool. After the announcement, attention will turn to Fed Chair Jerome Powell's press conference, expected to start at 2:30 p.m. Of course, Powell has been in the spotlight recently amid pressure from the White House to lower the overnight policy rate. It was just last week, after all, that Powell and President Donald Trump had that public back-and-forth over building renovation costs. All that to say, while the probability of a rate cut is low, intrigue around this meeting is high.
Those hoping the U.S. would strike a trade deal with China ahead of Friday's tariff deadline may need to temper expectations. The Asian country's negotiations are progressing on a separate timeline from the rest of the world, U.S. Commerce Secretary Howard Lutnick told CNBC on Tuesday. Lutnick previously said, as pointed out by CNBC's Kevin Breuninger, that Friday is a "hard deadline" for tariff payments, but countries can continue negotiating beyond said date. In this vein, Treasury Secretary Scott Bessent told businesses during an interview with CNBC that "it's not the end of the world" if the tariff levels suggested in early April take effect, as they may not be permanent. Yet multiple companies have said during recent earnings calls that the levies will cost them hundreds of millions of dollars.
Starbucks beat analysts' consensus forecast for revenue in the third fiscal quarter, sending shares rallying in Wednesday's premarket. The coffee chain's turnaround appears to be happening at a faster pace than expected, according to CEO Brian Niccol — whose move from Chipotle, you may remember, thrilled investors. Starbucks is trying to go back to basics in an effort to regain customers, as outlined by Mike Grams in an exclusive interview with CNBC's Kate Rogers this week. To be sure, there's ground to make up: The Seattle-based chain on Tuesday reported its sixth straight quarter of falling same-store sales.
Gucci isn't doing so hot. The well-known luxury brand's sales tumbled about 25% in the second quarter, according to parent company Kering. Sales for the company as a whole, meanwhile, fell 15% from a year ago and came in lower than analysts expected. Kering said it saw deterioration across all markets, with Japan and the broader Asia Pacific region leading the way down. As the kids say, that's "not Gucci."
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