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5 things you should know before the stock market opens on Wednesday, April 3rd

  • Markets had a rough day as investors fear the Fed will not cut interest rates in June as expected.
  • Shareholders will vote on the future of Disney's board on Wednesday, marking the culmination of activist investor Nelson Peltz's bitter proxy battle.
  • Tesla posted its first year-over-year drop in deliveries since 2020.

Here are the key news investors need to start the trading day:

The markets start the second quarter with a rough mood. Bond yields are rising and traders have lower expectations that the Federal Reserve will cut interest rates in June, causing markets to fall. The 30-stock Dow Jones lost nearly 400 points for the second day in a row on Tuesday. The S&P 500 fell 0.7%, while the Nasdaq Composite fell almost 1%. Investors will be keeping an eye on ADP's private payrolls report released on Wednesday before March employment data is released on Friday. Follow live market updates.

Bob Iger and Nelson Peltz.

CNBC

Activist investor Nelson Peltz's big battle against Disney comes to a head as shareholders vote on the company's board on Wednesday. Voters will decide whether the board deserves another year together or whether candidates nominated by activist investors, including Peltz of Trian Partners, should replace certain directors. Trian said, among other things, that the company had failed to generate significant revenue and that Disney's board and CEO Bob Iger were struggling with succession plans. Both sides have received support from influential shareholders ahead of Wednesday's meeting, which is scheduled to begin at 1 p.m. ET, although Disney is reportedly leading the vote, according to Reuters and Bloomberg.

A Tesla vehicle sits on a showroom floor on April 2, 2024 in Miami, Florida.

Joe Raedle | Getty Images

Tesla posted its first year-over-year decline in deliveries since 2020, when operations were disrupted by the pandemic. The electric vehicle maker on Tuesday reported first-quarter vehicle deliveries of 386,810, down 8.5% from a year earlier. Analysts expected deliveries of about 457,000 in the period, according to an average of 11 estimates compiled by FactSet. The company faced numerous challenges in the first quarter, including disruptions at a German factory outside Berlin. Tesla shares fell nearly 5% in trading on Tuesday.

A Humana Inc. office building in Louisville, Kentucky, February 3, 2019.

Bloomberg | Bloomberg | Getty Images

Shares of major U.S. health insurers fell sharply on Tuesday after the Biden administration announced payments for private Medicare plans that disappointed the insurance industry and investors. They had hoped for a larger increase in those payments, and the decision increases pressure on companies struggling with high medical costs. Humana, which is more dependent on these Medicare Advantage plans than its competitors, saw its shares fall 13% on Tuesday. Shares of CVS Health fell more than 7% on Tuesday, while shares of UnitedHealth Group fell nearly 7%.

A flare chimney burns behind the oil storage tanks at the Taneco oil refining and petrochemical complex operated by Tatneft PJSC in Nizhnekamsk, Tatarstan, Russia, on March 5, 2019.

Bloomberg | Bloomberg | Getty Images

Oil prices hit their highest since October on Tuesday amid heightened geopolitical risks and robust economic data. U.S. crude oil, the West Texas Intermediate contract for May delivery, rose $1.44, or 1.72%, to close at $85.15 a barrel. The Brent contract for June delivery, the global benchmark, rose $1.53, or 1.75%, to $88.94 a barrel. Investors are watching an escalating conflict in the Middle East that could threaten supplies, as well as a Ukrainian drone attack on a major Russian oil refinery.

— CNBC's Sarah Min, Alex Sherman, Rohan Goswami, Lora Kolodny, Annika Kim Constantino and Sam Meredith contributed to this report.

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