S&P, Nasdaq, Dow futures rally after long weekend

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The stock market is set to start the holiday-shortened week higher Tuesday.

S&P futures (SPX) +1.8% lead Nasdaq 100 futures (NDX:IND) +0.7% and Dow futures (INDU) +0.8%.

The broader market is coming off its worst week since March 2020, with the S&P falling 5.8%.

The 10-year Treasury yield is up 4 basis points to 3.28% and the 2-year is up 5 basis points to 3.22%.

Fed funds futures “were again moving in the direction of pricing in a more aggressive path of rate hikes, with the implied rate by the December meeting up +7.18bps to 3.625%, albeit still beneath their closing peak of 3.72% just before the Fed meeting,” Deutsche Bank’s Jim Reid said.

May existing home sales numbers arrive shortly after the start of trading. Economists expect sales to drop to an annual rate of 5.39M.

“Rising mortgage rates have been increasing the ‘price’ of owning a home (new buyers pay more of their income to service a mortgage),” UBS chief economist Paul Donovan wrote. “This has slowed demand – the pricing mechanism still works. Slower housing demand has a ripple effect on products like furniture and building supplies.”

In the homebuilding sector, Lennar is gaining premarket after topping expectations on the top and bottom lines.