5 things to know before the stock market opens Thursday, June 1

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

Stocks are set to kick off June trading with modest gains, as investors remain wary of debt ceiling deal progress in Washington and potential Federal Reserve rate hikes later this month. Dow Jones Industrial Average futures were about flat Thursday, while S&P 500 futures gained 0.2% and Nasdaq futures rose about 0.1%. “We have been impressed by the resilience of this market since the March low, absorbing a relentless onslaught of negative sentiment and headlines,” said Piper Sandler Chief Market Technician Craig Johnson. Follow live market updates.

It took a late-night vote and arm twisting, but a bill to raise the U.S. debt ceiling passed the House on Wednesday, mere days before the country risks its first-ever default on June 5. The chamber approved the measure in a 314-117 vote — a more overwhelming result than expected for a plan that included spending provisions that many Democrats and Republicans opposed. The Senate will forge ahead with the bill Thursday morning, and aims to send it to President Joe Biden’s desk as soon as Friday. It remains to be seen how quickly Majority Leader Chuck Schumer can push the bill through the famously slow-moving upper chamber, where one senator’s opposition can slow down swift passage of legislation. If the Treasury dries up, it would roil global financial markets, cost jobs and jeopardize vital government benefits for millions.

A slate of retail earnings reports has stocks swinging before the market opens Thursday, as some companies noted consumer weakness entering the spring season. Macy’s shares dropped as much as 10% after the department store operator slashed its full-year earnings and sales guidance. The company said it saw weaker discretionary spending starting in March and has had to mark down seasonal merchandise. Nordstrom’s stock, however, rose more than 3% after the company beat expectations on the top and bottom lines on Wednesday. While the retailer expects sales to fall this year, it reported sales improvements in April after a slow March. Shares of Chewy, meanwhile, soared more than 15% after the digital pet care retailer topped earnings and revenue estimates.

Amazon has agreed to hand over more than $30 million to the Federal Trade Commission to settle allegations of privacy violations involving its Alexa and Ring products, according to filings out Wednesday. The FTC claimed in separate lawsuits that Amazon was improperly securing or holding onto video recordings and profile data of users, including children. In addition to the settlement charges, Amazon will be required to delete scores of data. And because, according to the FTC, “Ring failed to implement basic measures to monitor and detect inappropriate access before February 2019, Ring has no idea how many instances of inappropriate access to customers’ sensitive video data actually occurred.”

More and more companies are looking to bring manufacturing operations home, pulling out of longstanding production powerhouses like China, in a trend called “reshoring” that could have massive implications for the global supply chain. According to Bank of America analysis, mentions of “reshoring” during S&P 500 earnings transcripts in the first quarter were up 128% over the same quarter last year, outpacing even the growth in mentions of “AI.” There’s a host of factors at play here: the Russia-Ukraine war, the aftereffects of the Covid-19 pandemic, U.S. and EU incentives for at-home production, and shifting demand due in part to the rise of TikTok. Still, remapping the global supply chain wouldn’t happen overnight.

– CNBC’s Yun Li, Christina Wilkie, Melissa Repko, Gabrielle Fonrouge, Lauren Feiner, Annie Palmer and Lucy Handley contributed to this report.

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