Dow Futures Rise, the 10-Year Yield Tops 3% — and What Else Is Happening in the Stock Market Today

Photo by ED JONES/AFP via Getty Images

AFP via Getty Images

Stock futures were rising Tuesday with the Federal Reserve poised to raise interest rates by half a percentage point, the biggest hike in more than two decades.

Contracts linked to the Dow Jones Industrial Average rose 86 points, or 0.3%, to 33,066, S&P 500 futures were rising 0.3% and Nasdaq futures gained 0.3%.

Stocks staged a late-day rally on Monday even as Wall Street prepared for an aggressive interest-rate hike from the Federal Reserve and as the yield on the 10-year Treasury finished the session hovering near 3%. The yield eclipsed 3% on Monday, the first time since 2018. Early Tuesday it was trading just below that level at 2.995%.

The Dow gained 0.3% on Monday, the S&P 500 finished with a gain of 0.6% and the Nasdaq closed 1.6% higher, reversing sharp losses earlier in the day.

While it’s widely expected the Fed will boost rates by 50 basis points at its meeting on Wednesday to cool inflation, what’s down the line from the central bank is the bigger question.

Danielle DiMartino Booth, chief executive and chief strategist of Dallas-based Quill Intelligence, and a former adviser to Richard Fisher, ex-president of the Dallas Fed, said with a 50 basis-point hike already priced in by the markets, “the focus will immediately shift to just how many half-point hikes the Fed expects to initiate over the balance of 2022.”

DiMartino Booth said the window for the Fed to engineer a “soft landing” — which entails lifting interest rates to slow down inflation, without pushing the economy into a recession — likely has closed. She said the “last economic pillar standing” is the labor market market, “but we’re already seeing a weakening in new job postings and the beginnings of layoff announcements as companies struggle with the profit margin squeeze brought on by stagflation.”

Wall Street will get a snapshot of the U.S. jobs market on Friday when the Labor Department releases the nonfarm payrolls report for April. Economists surveyed by FactSet expect the U.S. to have added 400,000 jobs last month, down from 431,000 in March. The unemployment rate is expected to remain steady at 3.6%.

Here are some stocks on the move Tuesday:

Expedia (ticker: EXPE) was rising 1.9% to $178.07 in premarket trading after revenue in the first quarter rose 80%, and Chief Executive Officer Peter Kern told analysts the online travel company was “feeling very good about asummer recovery.”

MGM Resorts (MGM) rose 1.5% after first-quarter adjusted earnings topped analysts’ forecasts and revenue rose to $2.85 billion, up from $1.65 billion a year earlier.

Clorox (CLX) declined after the maker of disinfectant wipes and other cleaning products cut its full-year earnings forecast, citing rising inflation.

Write to Joe Woelfel at joseph.woelfel@barrons.com