S&P 500 leads Nasdaq, Dow, yields drop as trading stays volatile

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Stocks are still bouncing around Tuesday, but have gained some traction to the upside in late morning trading.

The S&P (SP500) +0.7%, Nasdaq (COMP.IND) +0.3% and Dow (DJI) +0.4% are higher. The VIX is down but still above 30.

Longer rates are falling back after the 10-year Treasury yield topped 3% yesterday for the first time since 2018. The market has priced in a 50-basis-point hike in the fed funds rate tomorrow.

The 10-year is down 8 basis points to 2.92%. The 2-year yield is down 2 basis points to 2.71%.

Citing the uncertain Fed environment, Paul Tudor Jones said investors shouldn’t own stocks or bonds.

The March JOLTs numbers came in hot, with openings and number of quits at the highest levels of the surveys history.

“We are just shy of 2 vacancies for every unemployed worker,” Indeed economist Nick Bunker tweeted. “There were 1.9 openings per unemployed person in March. Quits rate is still well above pre-pandemic rate, but not surging like it was last year. Workers’ job security is still strong with the layoff rate just a bit above all-time lows.”

The labor market is showing few signs of cooling, which will only encourage a hawkish message from Fed chief Jay Powell tomorrow.

“Notwithstanding our expectation that the Fed hikes less than market expects over 2022 we do not see much room for doveishness in the May meeting,” Standard Chartered’s Steve Englander wrote. ” It took a while for the FOMC to form a consensus and we don’t see an incentive for that consensus to break in H1.”

Among active stocks, IPG Photonics is the biggest gainer in the S&P after earnings. Expedia is the big decliner as travel stocks tumbled on Hilton’s guidance.