5 things to know before the stock market opens Friday, May 20

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

1. Stock futures rise after S&P 500 closes on brink of a bear market

Traders work on the trading floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., May 19, 2022. 

Andrew Kelly | Reuters

Bond prices, which move inversely to yields, fell Friday as stocks rebounded in the premarket. The 10-year Treasury yield was trading around 2.9%. That’s just under the key 3% level that’s been breached on and off for weeks as traders push yields higher on the belief that the Federal Reserve will have to hike interest rates more aggressively to get inflation under control.

2. China cuts a key rate to try to boost its Covid-hampered economy

High-rise buildings in downtown Shanghai, China, on March 12, 2018. China cut its benchmark reference rate for mortgages by an unexpectedly wide margin on Friday, its second cut this year as Beijing seeks to revive the ailing housing sector to prop up the economy.

Johannes Eisele | Afp | Getty Images

China is going the other way with borrowing costs, cutting its benchmark reference rate for mortgages by an unexpectedly wide margin Friday. That’s the second reduction this year in this key rate as Beijing seeks to revive the country’s ailing housing sector to prop up the world’s second-largest economy. Senior Chinese officials have pledged further measures to fight a slowdown in economic growth due to lockdowns and other restrictive measures under that country’s zero Covid policy. Many private sector economists expect China’s economy to shrink this quarter from a year earlier, compared with first quarter’s 4.8% growth.

3. Ross Stores becomes the latest retailer crushed by inflation

Pedestrians pass in front of a Ross Stores location in San Francisco.

Noah Berger | Bloomberg | Getty Images

Back in the U.S., Ross Stores became the latest retail stock slammed after signaling that inflation was a problem. Shares of the off-price retailer sank 26% in the premarket, following quarterly misses on profit and revenue. In its first-quarter earnings release, out after the closing bell Thursday, Ross Stores also issued downbeat guidance. The company said Russia’s war in Ukraine has “exacerbated inflationary pressures,” adding that it faced tough year-over-year comparisons in the first half of 2022 due to expiring government Covid stimulus and pent-up demand normalizing.

4. CDC recommends a booster of Pfizer’s Covid vaccine for kids 5-11

A healthcare worker administers a Pfizer-BioNTech Covid-19 vaccine to a child at vaccination site in San Francisco, California, U.S., on Monday, Jan. 10, 2022.

David Paul Morris | Bloomberg | Getty Images

5. Musk denies ‘wild accusations’ in an apparent reference to a harassment report

SpaceX CEO Elon Musk participates in a postlaunch news conference inside the Press Site auditorium at NASA’s Kennedy Space Center in Florida on May 30, 2020, following the launch of the agency’s SpaceX Demo-2 mission to the International Space Station.

NASA/Kim Shiflett