May 3 (UPI) — U.S. markets posted slight gains for the second consecutive session Tuesday to start the month of May, investors awaited the Federal Reserve’s next meeting and digested another round of corporate earnings.
The Dow Jones Industrial Average gained 67.29 points, or 0.2%, while the S&P 500 rose 0.48% and the Nasdaq Composite closed up 0.22%.Tuesday’s gains came as the 10-year treasury yield receded below 3% after hitting a new milestone of 3.01% during trading Monday, its highest point since December 2018.
Fluctuations in bond yields have come as investors anticipate the Fed will raise raise interest rates by by 50 basis points and formally announce the beginning of quantitative tightening as it rolls assets off of its $9 trillion balance sheet.
Starbucks reported quarterly earnings after the bell Tuesday, posting revenue of $7.64 billion that just beat analysts’ expectations with per share earnings of 59 cents.
Shares of the coffee chain fell 1.38% during regular trading, but climbed more than 1% after hours.
Clorox stock also rose nearly 3% after it beat analysts’ expectations.
Chegg’s stock price fell 30.26% after the textbook company shared weak guidance for the remainder of the year, despite beating earnings expectations, while shares of Expedia fell 14.02% and Hilton dropped 4.25% after they posted quarterly earnings.
The energy sector led gains in the S&P 500 Tuesday as EOG Resources stock rose 3.83% and Exxon Mobil gained 2.06%, while Morgan Stanley and JPMorgan Chase stock both rose more than 2% to lead financials.
The beginning of May has been marked by volatile trading as the S&P is trading in correction territory, down about 12% from its record highs after markets turned in dismal performances in April.
“Volatility skews in both directions. In this period when we expect heightened volatility because of all of the confluence of factors that we see from geopolitics to earnings to the Fed to inflation, you’re going to have big swings like this,” Ross Mayfield, Baird investment strategy analyst, told Yahoo Finance.
“I think at a certain point, buyers do see some value in there. If you’re of the opinion that we’re not going to enter a recession … I think you start to see some value investors start to take some bites.”