U.S. stocks climbed on Tuesday as the Federal Reserve started a two-day monetary policy meeting, with most market participants expecting a rate hike.
The Dow Jones industrial average rose 116.36 points to close at 24,727.27, with Boeing as the best-performing stock. The S&P 500 gained 0.2 percent to end at 2,716.94, with energy leading the gains. The Nasdaq composite advanced 0.3 percent 7,364.30.
Market expectations for a March rate hike are 94.4 percent as of Tuesday afternoon, according to the CME Group's FedWatch tool. While most market participants expect the Fed to raise rates by 25 basis points, they will also look for clues about whether the central bank will stay on track to hike three times this year or if it expects to further tighten policy.
"The upcoming FOMC meeting is preceded by a market crash, elevated volatility, rising negative sentiment around trade, while consensus view of the Fed remains hawkish," said Dubravko Lakos-Bujas, head of U.S. equity strategy at J.P. Morgan, said in a note Tuesday. "Given this backdrop, even a slightly dovish Fed outcome would setup a rather low bar for equities to advance."