The Dow Jones Industrial Average showed no sign of breaking its record run on Tuesday, even as investors started to brace for a U.S. interest rate hike this week.
Futures for the blue-chip benchmark climbed 67 points, or 0.3%, to 19,790. If the Dow opens higher and keeps its gain through the session, it will log its seventh consecutive record close. The benchmark on Monday bucked a negative trend across the U.S. stock markets and closed at an all-time high.
"U.S. markets are still celebrating the idea of a pro-business administration coming into the White House, but the accompanying inflationary aspects don't seem to be fully accounted for. We like to think markets are really efficient, but it's perhaps at times like this that you realize how fallible an assumption like that can be," said Tony Cross, market analyst at TopTradr, in emailed comments.
"We really do seem to be off the chart here, and I can't see what justifies further upside for the Dow, especially on the basis we may see a hawkish statement from the Fed tomorrow," he added.
Meanwhile, futures for the S&P 500 index gained 6.10 points, or 0.3%, to 2,256.50, while those for the Nasdaq-100 index added 15.50 points, or 0.3%, to 4,881.75.
Both the S&P 500 index and Nasdaq Composite ended lower on Monday, with investors appearing reluctant to push shares higher ahead of the Fed meeting.
Fed meeting: The central bank kicks off its two-day policy-setting meeting on Tuesday and will deliver its rate announcement on Wednesday at 2 p.m. Eastern Time. The bank is widely expected to raise its benchmark rate by 25 basis point, so the big question for traders is how hawkish or dovish the statement will be.
"Stock traders appear to be betting on a dovish Fed," said Ipek Ozkardeskaya, senior market analyst at London Capital Group, in emailed comments.
"The FOMC will certainly attempt to temper the Fed hawks at this week's meeting, given that they have massively taken over the market since Donald Trump's presidential victory. In this context, the Dow could attract fresh buyers, even if it is trading at the historical high levels," she said.