Stock Market Today: Dow Rises, Alibaba Soars, Okta Sinks

Stocks aren’t the only thing rising, however. The 2-year Treasury yield had gained 0.06 percentage point to 2.19%, near new pandemic-era high, while the 10-year Treasury yield has risen .09 percentage point to 2.39%, also a new pandemic-era high. That comes a day after Fed chair Jerome Powell said the central bank would consider hiking rates in increments of a half a percentage point, rather than the standard quarter of a percentage point and a sign that the Fed is serious about taming inflation. 

The moves come one day after Fed Chair Jerome Powell seemed to spook the market with a “hawkish” commentary that suggested a half-point interest rate hike could be in the offing in the near future. Rising rates and bond yields should be bad news for the stock market, but it seems to be taking the increases in stride. “[Bottom] line, equities have shown resilience in the face of the surge in yields since last week’s Fed meeting, however, if we see yields accelerate higher again today like we did yesterday, it will be increasingly difficult for stocks to extend their recent rally,” wrote Tom Essaye, founder of Sevens Report Research. 

This continues a bounce from a recent low point, as investors buy beaten-down shares. After the S&P 500 had fallen deep into correction territory—defined as a drop 10% or more from a high—it has risen just over 8% from hitting its 2022 low hit on March 8. Investors had raised a lot of cash that they were eager to put to work as stock prices had fallen. 

The rally in stocks still makes some sense, though. Economic growth is still expected t be strong, as real gross domestic product growth in the U.S. is still expected to be 3.6% this year and 2.3% in 2023, according to FactSet. “Equities have held up partly because the surge in 10yr yields is consistent with a strong economy and recession risk remains low over the 12 months,” wrote Dennis DeBusschere, founder of 22VResearch. 

Of course, the scary part is that financial markets are saying that there’s a higher probability that those estimates will soon come down. 

The next tests for the S&P 500 will come at 4500, which it’s now trying to break, and then as it nears the 4,600 level. Sellers have come in near the latter level twice this year to send the index lower again. But even if the current rally stalls, it might not mean the end of the world. “The next levels of resistance that may be tested lie in the 4500 and 4600 areas,” writes Zev Spiro or Orips Research. “In the very near term, a consolidation or minor pull back would be healthy prior to higher levels.”

Stay tuned.

Here are a handful of stocks on the move Tuesday:

Alibaba (ticker: BABA) rose 14% in the U.S. premarket, and its Hong Kong stock gained more than 11% after the Chinese e-commerce giant announced that it would increase the size of its share buyback program to $25 billion from $15 billion.

Okta (OKTA) was down 2.6%, paring more severe losses, following news of a digital breach at the authentication service provider. Okta has said it is investigating the breach and CEO Todd McKinnon said via Twitter that there was no evidence of ongoing malicious activity.

Nike (NKE) jumped 4% after the sporting goods giant reported better-than-expected quarterly profit late Monday, with strong product pricing offsetting headwinds from lower sales in China. The news also buoyed shares in competitor

Adidas (ADS.Germany), which rose 2% in Frankfurt trading.

Altria Group (MO) stock gained 1.5% after getting upgraded to Buy from Neutral at

Goldman Sachs. The bank downgraded competitor 

Philip Morris International (PM) to Neutral from Buy. The stock initially fell, then rose 0.1%. 

Write to Jack Denton at jack.denton@dowjones.com