5 things to know before the stock market opens on Wednesday

Here are the most important information investors need to start their trading day:

US stock markets entered a deep funk on Wednesday. After big losses on Monday, stocks fell again on Tuesday: the Nasdaq lost 2%, the S&P 500 fell 1.4% and the Dow fell more than 1%. Even with China easing its Covid restrictions, which should support that country’s economy, investors are increasingly worried that the Federal Reserve could hold its inflation-fighting rate hikes longer than expected. Fed policymakers are expected to hike rates another half a percentage point when they meet next week. Read live updates here.

Another prospect weighing on investors’ minds? The potential for a recession next year, especially as the Fed works to cool the economy. Several of America’s top CEOs appeared on CNBC on Tuesday to weigh in on the possibility of a downturn. JPMorgan CEO Jamie Dimon said a number of factors, including geopolitical crises and sustained rate hikes, “could well derail the economy and cause this mild to severe recession that people are worried about.” Walmart CEO Doug McMillion, meanwhile, said a recession may be needed to reduce inflation. And while GM CEO Mary Barra said she wouldn’t call if there was a recession, she said the automaker plans to be “pretty conservative” in 2023.

Senator Raphael Warnock made history Tuesday night by becoming the first black American senator elected from Georgia. His runoff victory over Republican candidate and former soccer star Herschel Walker – who had the backing of former President Donald Trump – also gave Democrats a 51-49 advantage in the Senate, giving them more weight and putting an exclamation mark on a much better-than-expected midterm election cycle for the party. While the Democrats narrowly lost the House, they actually won a seat in the Senate. Usually, the party of an incumbent president suffers big losses mid-term. Now, while President Joe Biden likely won’t be able to advance his legislative agenda over the next two years, he will now likely have an easier time confirming any justices and Cabinet appointments he may have to make. .

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This is a first for the United Auto Workers. On Wednesday and Thursday, the union will hold a vote to organize about 900 workers at an electric vehicle battery plant in Ohio, a joint venture between General Motors and LG Energy Solution. Employees are expected to vote in favor of the organization, which could help the UAW set a precedent for labor as the auto industry shifts toward electric vehicle production and away from gas-powered cars. “If they can show that the workers there trust the union, then other battery factories might have more pressure to follow suit,” Cornell University labor professor Art Wheaton told CNBC. . GM-LG Energy Solution joint venture Ultium plans to build at least four more battery factories, while rivals Ford and Stellantis have their own battery factory plans.

Ukrainian and Russian forces are engaged in fierce trench warfare in Ukraine’s Donetsk region. The Russians are seeking to capture the small town of Bakhmut in the southeast of the country, after months of battlefield progress by the Ukrainian army. Meanwhile, Ukraine has yet to officially claim credit for drone strikes on bases well within Russia’s borders. US Secretary of State Antony Blinken also said the Biden administration neither encouraged nor allowed Ukraine to strike inside Russia. Read live war updates here.

– CNBC’s Tanaya Macheel, Rebecca Picciotto, Kevin Breuninger, Michael Wayland and Holly Ellyatt contributed to this report.

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