tuesday market open as banking uncertainty eased and stock index futures built on yesterday’s gains expectations solidified for a 25basispoint interest rate hike by the federal reserve the probability of that increase hit 85 this morning according to the cme fedwatch tool up from 60 as recently as early monday a wall street journal report that jp morgan chase jpm ceo jamie dimon is leading discussions to stabilize first republic bank frc appeared to lend support to the stock market early tuesday and the banking sector—including frc—rallied in premarket trading at the same time fixed income continued its retreat and volatility gave back about half the gains of the last 12 days the dollar is also lower while crude oil rallied all this suggests concern and uncertainty are easing and helps reinforce expectations that the fed might hike rates however with the federal open market committee fomc meeting beginning today and a decision tomorrow it’s unclear how much traction this rally can gain investors might want to remember that stocks have often climbed ahead of recent fed meetings only to sink as participants digested postmeeting remarks from fed chairman jerome powell for those trading today keep in mind that everything remains fluid and is subject to change as new information pours in consider smaller trading sizes if you’re concerned about recent volatility   the us dollar index dxy recently traded lower at 10318   the cboe volatility index® vix futures declined to 227 after reaching nearly 29 at one point monday   wti crude oil cl climbed to 6883 per barrel up sharply from recent lows under 65 stocks took their cues monday from volatility to some extent the vix fell below 25 by midday and that could continue being a psychological level to watch treasury yields also ticked higher which—after last week’s cratering—could be seen as positive for stocks that may sound counterintuitive since climbing yields typically hurt equities but when there’s uncertainty falling yields can reflect investors fleeing stocks for the perceived “safety” of fixed income that lack of confidence isn’t a bullish vote of confidence in wall street over the last week it feels like just about every pundit and newspaper editorial board has made arguments for or against a rate increase now it’s up to the voters so to speak the outcome of the fomc meeting goes far beyond the question of to hike or not to hike there’s also the fomc’s updated economic and rate projections and the tone fed chairman jerome powell takes at the postmeeting press conference tomorrow afternoon some analysts believe he’ll borrow a page from the european central bank’s ecb playbook as the ecb raised rates last week at the time ecb president christine lagarde said that the central bank was standing strong against inflation but prepared to step in to supply liquidity amid banking sector turmoil chances of rates being at the current 45 to 475 or higher by december are now around 25 according to the fedwatch tool meaning the market has built in 75 chances of a rate cut at some point this year will the fed’s dot plot tomorrow and its terminal or peak forecast back up these projections the 2year treasury yield fell below fed funds futures last week something that historically has indicated the end of fed tightening cycles real estate comes into focus 30 minutes after the opening bell today with february existing home sales figures it follows betterthanexpected housing starts and building permits last week and comes ahead of february new home sales due thursday mortgage rates began to fall last week though that won’t be picked up in february’s home sales data in fact rates spent much of february on the climb reaching 7 for the 30year mortgage at one point rising rates could factor into home sales though maybe not directly as a barrier to growth instead it might be reflected in a higher proportion of homes being sold through cash sales or in falling home purchases by firsttime buyers who tend to be more sensitive to rising borrowing costs existing home sales are expected to rise 05 monthovermonth in february to a seasonally adjusted 41 million according to trading economics new home sales for february are expected thursday and consensus is for a 45 drop from january when sales soared stay tuned wednesday afternoon for more perspective on the housing market when home builder kb home kbh is expected to report earnings cue the running metaphors ahead of nike’s nke earnings expected after the close today nke looks to press the pace after its previous healthy quarter and analysts see revenue of 114 billion and earnings per share of 051 according to earnings whispers nke’s large presence in china can make it a helpful barometer of that country’s reopening barron’s reported over the weekend that sportswear demand has surged in china recently and is expected to grow by doubledigits this year—perhaps good news for the company with a swoosh share prices rose in december following a nke revenue beat and analysts then noted progress in clearing out bloated inventories check for updates on that front and also look for the status of nke’s gross margin inventory issues leading to markdowns have been a challenge remember nke can have an impact on other apparel and athleticwear makers stocks like lululemon lulu under armour uaa and foot locker fl often rise or fall in sympathy when nke reports more earnings are on tap later this week from accenture acn kb home kbh darden restaurants dri and general mills gis   the dow jones industrial average® dji climbed 382 points or 12 to 32244   the sp 500® index spx climbed 35 points or 089 to 3951 back above its 200day moving average of 3936 it was back to the future for major stock indexes monday as sectors like financials smallcaps and energy that got hammered last week jumped to the top of the leader board amid more assurances from the fed that the us financial system is resilient meanwhile last week’s trend setters—info tech and communication services—spent part of monday in the red before finishing with modest gains heavierthannormal volume at the new york stock exchange nyse monday might have indicated decent conviction behind the rally still spillover buying may be hard to come by while the fomc decision looms   in one sense the 180degree turn suggests some investors think things got overdone to the downside on some stocks and to the upside on others signs of stability in the banking sector over the weekend along with the forced takeover of credit suisse by ubs brokered by swiss regulators appeared to ease some of the fears that led many to pile into treasury bonds the us dollar and megacaps   that arguably set the stage for monday’s turnaround but doesn’t undo what’s been a major sector rotation over the last month favoring “riskon” parts of the market like tech and communication services those two sectors are both up doubledigits so far in march   treasury yields rebounded a bit monday not necessarily on anything fedrelated but more in a recovery from last week’s dive the 10year treasury note yield tnx managed to stay above support levels seen between 335 and 34 and the premium of the 2year treasury note yield to the tnx is now near 50 basis points—a dramatic step back from the 42year high above 100 posted less than two weeks ago we haven’t seen this sort of volatility in fixed income since 1987 and it speaks to the potential for continued volatility in stocks quick take don’t forget to check schwab’s weekly market outlook for chief global investment strategist jeffrey kleintop’s 90second take on the markets for the week ahead talking technicals gold swung back to peaks it visited early last year rallying above 2000 an ounce monday it was the first time at that lofty level since an intraday move last april 18 incidentally the last time gold was above 2000 the us fed funds rate was around 025 and now it’s above 45 higher rates typically keep gold down which is exactly what we saw most of last year if the rally continues the 2022 high of 2078 is a possible resistance area not far below the 2020 peak of 2089 ideas to mull as you trade or investstorm shelter leak investors piled into info tech stocks recently due to banking industry fears but by some measures the tech sector might not provide an umbrella the recent instability in financials could have a negative fundamental impact on tech one analyst told cnbc monday in part because financial companies tend to be massive buyers of tech products drilling down to one aspect—cloud computing—many financial firms were intending to shift their workloads into the public cloud over the next five years according to a 2022 report by management consulting firm mckinsey  co it’s unclear how or whether recent pressures on the banking industry could affect those plans or what that might mean for clouddriven companies like amazon amzn microsoft msft and alphabet googl which points up another reason why tech is considered a “riskon” sector its dependence on spending decisions by other companies cloud cuts speaking of tech amzn announced 9000 additional layoffs on monday adding to the drumbeat of tech companies cutting jobs notable this time is where some of the job cuts occur—amzn’s amazon web services aws its cloud division and the primary engine of recent growth as some analysts pointed out aws hit the “law of large numbers” over the last few years unable to continue the better than 40 annual growth it once posted some analysts expect aws growth to slow to the high teens this year though it remains the leading cloud business ahead of msft and googl while it’s easy to say amzn’s cuts simply reflect internal issues as the company deals with low margins it also could speak to continued slowing in cloud demand msft offered a conservative cloud outlook the last time it reported and also saw sequential slowing in that business as noted above the financial turmoil and recession worries could have an impact on cloud spending raising questions for cloud companies in general earnings reports next month could help lift the haze hike and pause one idea you don’t see touted as much but could possibly be an option would be for the fed to raise rates but pause its quantitative tightening qt program the fed instituted qt last year to shrink its swollen balance sheet by about 95 billion a month the impact over time is thought to be similar to that of rate hikes though its ultimate effect is still “uncertain” fed chairman jerome powell said last year one supposed benefit of qt is to allow the fed to “reload for the next crisis” the federal reserve bank of richmond noted last year in a research piece for that reason the fed might be hesitant to pause qt but whether it’s a pause in hikes or qt either action potentially sends a signal that the fed is worried about structural issues more than inflation which might not soothe investors march 23 february new home sales and expected earnings from accenture acn general mills gis and darden restaurants dri march 28 march consumer confidence and expected earnings from mccormick mkc and walgreens boots alliance wba this post contains sponsored advertising content this content is for informational purposes only and not intended to be investing advice