US stocks extend gains as volatility recedes amid softer rate forecasts

• US stocks extended their gains on Tuesday as market volatility continues to recede after last month's banking crisis.
• The CBOE Volatility Index fell below 19 on Monday, marking its seventh consecutive daily decline.
• The drop in volatility comes as interest rate hike forecasts from the Fed continues to soften.

US stocks were mostly higher on Tuesday as market volatility continues to recede following last month's banking crisis.

The CBOE Volatility Index fell below the 19 level on Monday, marking its seventh consecutive daily decline. A VIX below its long-term average level of 20 is seen as a low volatility market environment.

Helping fuel the decline in volatility are growing expectations that the Federal Reserve will be less aggressive with its interest rate hikes going forward. The CME FedWatch Tool currently forecasts just one more 25 basis point rate hike at its May meeting, followed by a pause in June and a 25 basis point cut in July.

By the end of the year, the Fed is currently expected to cut interest rates by at least 50 basis points from the current range of 4.75%-5.00%. Lower inflation readings would help support those expectations.

Here's where US indexes stood shortly after the 9:30 a.m. ET opening bell on Tuesday:

• S&P 500: 4,127.51, up 0.07%
• Dow Jones Industrial Average: 33,584.21, down 0.05% (16.94 points)
• Nasdaq Composite: 12,193.16, up 0.03%

Here's what else is happening this morning:

• JPMorgan CEO Jamie Dimon released his annual shareholder letter on Tuesday, in which he warned that US banking turmoil isn't over.
• Credit Suisse's chairman told shareholders Tuesday that he was "truly sorry" about the bank's recent troubles, which led it to it being rescued by rival UBS.
• German insurers will renew coverage for the Nord Stream 1 natural gas pipeline that blew up last year after suspected sabotage.

In commodities, bonds and crypto:

• West Texas Intermediate crude oil rose 1.54% to $81.66 per barrel. Brent crude, oil's international benchmark, jumped 1.22% to $85.97.
• Gold rose 0.08% to $2,002.10 per ounce.
• The yield on the 10-year Treasury rose six basis points to 3.48%.
• Bitcoin jumped 1.54% to $28,300, while ether jumped 3.75% to $1,876.