Tax reform was the main driving force for optimism in markets stateside. Included in the finalized version of their tax planis a provision to cut the corporate tax rate from 35 percent to 21 percent in 2018, which would likely give corporate profits a boost.
Two holdout Republican senators on Monday confirmed that they would back the tax plan, leaving Sen. Jeff Flake, R-Ariz., the only publicly undeclared GOP senator. With Sen. John McCain fighting brain cancer, the bill will fail in the Senate if two of the remaining 51 Republicans oppose it.
The House is expected to vote on the bill on Tuesday U.S. time.
Major U.S. indexes climbed as the bill moved closer to potentially becoming legislation. The Dow Jones industrial average rose 140.46 points, or 0.57 percent, to its 70th record close this year. The index, which closed at 24,792.2 on Monday, has climbed more than 5,000 points in the year.
Despite optimism over the tax plan, the dollar edged lower against a basket of major currencies overnight. On Tuesday, the dollar index was mostly flat at 93.646 at 2:52 p.m. HK/SIN after trading above the 94 handle in the last session.
Against the yen, the dollar was steady at 112.53, near levels seen at the end of last week.
In other news, President Donald Trump on Monday unveiled his national security strategy, which referred to Russia and China as "revisionist powers." It also noted that those countries were "determined to make economies less free and less fair."
Before the release of the document, China had said on Monday that its economic relations with the U.S. were "healthy" and mutually beneficial, Reuters reported.
On the energy front, oil prices were slightly firmer as markets digested a mix of variables. That included the ongoing Forties Pipeline shutdown in the North Sea and an oil union strike in Nigeria, although Reuters reported that the strike was ended within the day.
On Tuesday, U.S. crude futures edged up by 0.33 percent to trade at $57.35 after slipping slightly in the previous session. Brent crude was 0.25 percent higher at $63.57.