NEW YORK (AP) _ The stock market edged upward today as interest rates declined.

The Dow Jones average of 30 industrials rose 1.57 to 1,298.28 in the first hour.

Gainers held a 7-6 lead over losers among New York Stock Exchange-listed issues.

Interest rates moved lower in the credit markets today. Prices of long-term government bonds, which rise when rates fall, gained about $5 for every $1,000 in face value.

Otherwise, analysts said investors were generally in no rush to make commitments with several unsettled questions on their minds.

Congress's work on a measure to narrow the federal budget deficit is about to enter its most important stage, with a conference committee tackling the task of reconciling bills from the House and Senate.

Next Tuesday, President Reagan is scheduled to make a formal presentation of his revised plan for tax reform. Many details of the proposal have already surfaced, but it remains to be seen what reception the package gets from Congress and the public.

Brokers also said trading activity was likely to be relatively light as many market participants get an early start on the Memorial Day weekend. The markets will be closed Monday in observance of the holiday.

Among actively traded blue chips, International Business Machines advanced 1/8 to 1311/2 ; American Telephone & Telegraph 1/4 to 233/8 , and Exxon 1/4 to 531/2 .

The NYSE's composite index added .14 to 108.61. At the American Stock Exchange, the market value index was up .32 at 229.79.

Opening-hour volume on the Big Board came to 25.52 million shares.