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Stock index futures currently point to a lower open Tuesday, but the swings in yesterday’s action have extended into premarket trading today.

S&P (SPX), Nasdaq 100 (NDX:IND) and Dow (INDU) futures are down around 0.4%. The VIX is lower, but remains elevated above 30.

Rates are mixed a day ahead of the FOMC decision, widely expected to be a 50-basis-point hike.

The 10-year Treasury yield topped 3% yesterday for the first time since 2018. It is backing off a bit, down 3 basis points to 2.97%. The 2-year yield is up 2 basis points to 2.75%.

“The last time the U.S. 10-year Treasury yield rose above 3% (during 2018), the stock market suffered 10%, 7%, and 20% drawdowns,” MKM’s Michael Darda wrote. “In short, the forward multiple on the S&P 500 collapsed to 15x from 19x. Despite a 14% drawdown from the YTD highs through last week’s close, the S&P 500 forward multiple is just a touch below 19x. Thus, if long rates remain near current levels or rise further, there will likely be more valuation compression ahead.”

“This doesn’t mean the market cannot or will not bounce in the near term, as we suggested in our Sunday note (the AAII poll of individuals shows the percentage of bulls near a 30-year low, usually a near-term contrary indicator).”

March factor orders arrive shortly after the open, with economists looking for a 1.1% rise.

April ISM manufacturing numbers were disappointing yesterday.

“Manufacturing accounts for only about 11% of U.S. GDP, so the downshift in the ISM manufacturing survey is not necessarily an alarm bell for the whole economy,” Pantheon Macro said. “Indeed, manufacturing has suffered two recessions in recent years, from Q1 2015 to Q2 2016, and from Q4 2018 to Q4 2019, but GDP continued to rise uninterruptedly.

“We need to make this point now because the prospects for manufacturing are dimming, thanks to the chaos triggered by China’s zero-Covid policy. No end is in sight to the increasingly severe disruptions, which appear to be crushing the country’s manufacturing sector.”

Earnings continue to roll in. Pfizer is up before the bell after beating on the top and bottom lines.