The Dow industrials were set to open within striking distance of the psychologically important milestone of 20,000 on Wednesday, as the "Santa rally" that has pushed U.S. stocks to record highs continued.
Futures for the Dow Jones Industrial Average gained 10 points, or 0.1%, to 19,909, putting the benchmark on track to open near the 20,000 handle. On Tuesday, it closed at a record-high 19,974.62, thanks in part to gains for Goldman Sachs Group Inc. (GS) and Exxon Mobil Corp. (XOM) .
"The 20,000 Dow level has been seen as a somewhat magical target for a long time, and the prospect of the Dow reaching and closing over this level will provide headlines," said Rebecca O'Keeffe, head of investment at Interactive Investor, in a note.
"However, it also raises some important questions about the lofty levels of markets and their potentially complacent attitude towards potential downside risks," she added.
The Nasdaq Composite Index also eked out a record close on Tuesday, while the S&P 500 index rose 0.4% to close less than a point short of its all-time closing high.
On Wednesday, futures for the S&P 500 index slipped 1.25 point, or 0.1%, to 2,265.25, while those for the Nasdaq-100 index dropped 2 points to 4,954.
All three major U.S. stock indexes are on track for yearly gains of around 10% or more, with the biggest chunk of the rally coming in recent months. Analysts peg the rally to optimism that the Donald Trump administration will increase fiscal spending and potentially spur inflation.
That has fueled a rotation from bonds and into stocks, with inflows into equity funds since the election reaching $63 billion last week, according to a report from Bank of America Merrill Lynch. In comparison, stock-fund outflows tallied $151 billion between January and October.
"Bears have been carried out [in 2016], as a wave of market liquidity pounced on any downturn and squeezed the market higher," O'Keeffe said.
"However, as we head towards the new year, whether this confidence will remain justified in 2017 is a rather more moot point. Like this year, 2017 could bring about a range of potentially seismic events, with European elections and many of Donald Trump's campaign pledges high on a list of potential negative surprises," she added.