5 things to know before the stock market opens Wednesday

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

The Biden administration has announced the first 10 drugs that will be subject to price negotiations between manufacturers and Medicare, kicking off a process that aims to lower medication costs for older adults. The drugs on the list are among the top 50 with the highest spending for Medicare Part D, which covers prescription medications that seniors fill at retail pharmacies. It’s the first time in Medicare’s nearly 60-year history that it will be able to directly hash out drug prices with manufacturers. President Joe Biden has touted it as a way to save taxpayers money, but drugmakers — including Merck, Johnson & Johnson, Bristol-Myers Squibb and Astellas Pharma — are suing to stop the negotiation process, saying they would be forced to sell medicines at huge discounts, below market rates.

U.S. regulators are responding to the regional banking crisis that flared up this spring and led to the failure of several banks. A group of agencies unveiled plans Tuesday that will require regional banks to issue debt and bolster their so-called living wills. All American banks with at least $100 billion in assets will be subject to the new requirements. In other words, some of the rules that have applied to the biggest institutions would now apply to midsize banks in order to protect the public in the event of more failures. According to the plans, lenders will have to maintain long-term debt levels equal to 3.5% of average total assets or 6% of risk-weighted assets, whichever is higher.

Could we be on the brink of the next big thing for crypto? An appeals court in Washington, D.C., has opened the door for bitcoin exchange-traded funds. The court ruled against the Securities and Exchange Commission, which denied Grayscale’s application to convert the Grayscale Bitcoin Trust to an ETF. The decision could also benefit other companies that want to create bitcoin ETFs, such as BlackRock and Fidelity, as well as crypto bulls who see such an ETF potentially leading to more mainstream adoption. Bitcoin and ether surged after the news, along with other major cap crypto coins. Coinbase, which is listed as the custodian partner in multiple spot bitcoin ETF applications, closed nearly 15% higher on Tuesday.

Hurricane Idalia made landfall on the western Florida coast as a Category 3 storm Wednesday morning. It hit the lightly populated Big Bend region, where the Florida Panhandle curves into the peninsula. No major hurricanes on record have ever passed through the bay abutting the area, leading the National Weather Service to call the storm “an unprecedented event.” Evacuation notices — some mandatory — were issued in 22 counties along Florida’s western coast, which could see storm surges as high as 15 feet and floods.

— CNBC’s Brian Evans, Alex Harring, Kif Leswing, Annika Kim Constantino, Hugh Son, MacKenzie Sigalos, Tanaya Macheel and the Associated Press contributed to this report.

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