U.S. equities closed higher on Tuesday as investors kept an eye on a key Federal Reserve meeting, while the Dow Jones industrial average closed in on another milestone.
The Dow closed at a record, rising more than 100 points, with IBM, Apple and Home Depot contributing the most gains. The S&P 500 also ended at an all-time high, rising 0.6 percent, with energy and information technology leading advancers. The Nasdaq composite outperformed, advancing 0.9 percent to a new all-time high.
The Fed began a two-day monetary policy meeting, with most market participants expecting the central bank to raise interest rates by 25 basis points. According to the CME Group's FedWatch tool, market expectations for a rate hike were above 90 percent.
"To me, it's all about what they say about their guidance for 2017," said Eric Stein, co-director of global income at Eaton Vance. "I don't expect them to be particularly hawkish tomorrow," but we could see a more hawkish Fed in the near future.
"A new political regime took hold on November 8th and tomorrow we'll see if there is any acknowledgement of that from the FOMC and whether we're about to embark on a new monetary regime. I would define 'new monetary regime' as anything more aggressive than the pace of one rate hike per year," said Peter Boockvar, chief market analyst at The Lindsey Group, in a note.
The meeting is expected to conclude Wednesday, with Fed Chair Janet Yellen scheduled to hold a news conference at 2:30 p.m. ET.
U.S. Treasury yields were mixed on Tuesday, with the benchmark 10-year yield trading around 2.47 percent, a day after breaking above 2.5 percent for the first time since 2014. The two-year note yield rose, last trading around 1.16 percent. Yields have risen sharply since the election, as investors have dumped Treasurys as optimism surrounding possible tax cuts and deregulation of certain sectors has made other assets more attractive.
Investors also kept an eye on the Dow, as it got closer to hitting 20,000 or the first time, having broken above 19,000 less than a month ago. As of Tuesday's close, the Dow was within 1 percent away from hitting 20,000.
Dow since US election