Dow Jones, S&P 500, Nasdaq rise modestly heading for second positive week

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U.S. stocks start Friday’s session mixed as investors digest the U.S.’s LNG deal with the EU, gauge the strength of the economy, and increase bets for upcoming 50-basis-point hikes at upcoming Fed meetings.

In early trading, the Nasdaq +0.1%, the S&P 500 +0.2% and the Dow Jones +0.2. Among S&P 500 sector, Consumer Discretionary take the lead, while Energy is the weakest.

Major equity indexes’ upward move give them a fighting chance to log in their second straight positive week following a disappointing beginning to 2022. In Treasurys yields, the short end is rising faster than the longer end. 2-year Treasury yield climbs 7 basis points to 2.21%, while the 10-year yield rises 4 bps to 2.42%.

Crude oil is pulling back 2.4% to $109.63 per barrel.

Traders are seeing a bigger chance that the Federal Reserve will hike rates by 50 bps at its May meeting, pushing the probability up to 68% vs. a 44% probability a week ago. Note that on Monday, Fed Chair Jerome Powell said the central bankers would implement a 50-bp hike if needed.

In a recent note, Citi strategists now expect the Fed to boost rates by 275 bps in 2022, with 50-bp hikes in May, June, July, and September.

In another Citi note, strategists see the 2s10s yield curve inverting over the coming months and possibly the 3m10y curve. “So for risk assets, this means U.S. > Rest of the World equities, large cap > small cap and defensive > cyclicals,” the group led by Jamie Fahy wrote.

Earlier, European stocks mixed with Ukraine, monetary policy in focus

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