Major U.S. indexes hit a trifecta of records Tuesday despite relatively muted trading as investors braced for the Federal Reserve's policy decision this week.
Easing geopolitical concerns and steady global growth have encouraged investors to keep lifting stocks higher in recent sessions, with the gains Tuesday fueled by telecommunications and financial companies.
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Still, the subdued trading environment Tuesday saw the S&P 500 notch one of its smallest intraday ranges since May.
Investors appeared to be holding off on making new bets ahead of the Fed's upcoming policy announcement. Many expect the central bank to announce Wednesday that it will keep rates unchanged and that it will start unwinding its $4.5 trillion balance sheet.
"It's a really quiet market. People are in a wait-and-see mode ahead of the Fed meeting," said Bret Chesney, a senior portfolio manager at Alpine Global Management. "With the things I'm trading today, just nodding at the stock moves prices."
The Dow Jones Industrial Average gained 39.45 points, or 0.2%, to 22370.8 -- the blue-chip index's eighth consecutive session of gains. The S&P 500 added 2.78 points, or 0.1% to 2506.65, and the Nasdaq Composite rose 6.68 points, or 0.1%, to 6461.32. Each of the major indexes closed at new records Tuesday.
The S&P 500 telecommunications sector climbed 2.3%%, among the biggest gainers in the broad index, after CNBC reported that T-Mobile and Sprint were in active talks about a merger. Sprint rose 52 cents, or 6.8% to $8.20, while T-Mobile gained 3.62, or 5.9%, to 65.42.
Major indexes also got a boost from financial companies, which rose along with bond yields Tuesday. Higher yields tend to boost lenders' profits. Comerica gained 1.16, or 1.6%, to 71.84, while U.S. Bancorp added 78 cents, or 1.5%, to 53.16.
The yield on the benchmark 10-year U.S. Treasury note rose to 2.239%, according to Tradeweb, from 2.230% Monday. Yields fall as bond prices rise.
Many investors have been skeptical the Fed will raise rates again this year, citing subdued inflation readings and concerns around the economic toll of major summer hurricanes.
"The data that has been coming out from the U.S. has been a bit of a mixed bag...so I think it is maybe time for the Fed to take a break," said Trip Miller, managing partner at Gullane Capital Partners, who doubts the central bank will increase rates again this year.
However, data last week showing a bigger-than-expected jump in U.S. consumer prices gave a fresh boost to investor expectations for one more rate rise in 2017.
Federal-funds futures, used by investors to place bets on the Fed's rate-policy outlook, showed Tuesday a 57% chance that the central bank will raise interest rates again by December, according to CME Group data, up from 41% a week ago.
"The recent growth in economic fundamentals have been very supportive of a rate hike" this year, said Anwiti Bahuguna, a senior portfolio manager at Columbia Threadneedle Investments. "But it's still a coin toss."
Any messaging from the Fed that departs from investors' expectations could shake up the markets, some traders and investors said.
"We could get some volatility tomorrow afternoon if the statement is considerably different from what we're expecting," said Thomas Wright, director of equities at JMP Securities.
Elsewhere, the Stoxx Europe 600 added less than 0.1%, posting its eighth advance in the past 10 trading sessions.
Markets in Asia closed mixed, with Japan's Nikkei Stock Average jumping 2% to its highest close since August 2015 and Hong Kong's Hang Seng Index falling 0.4%.
-- Marina Force contributed to this article.
Write to Michael Wursthorn at Michael.Wursthorn@wsj.com
(END) Dow Jones Newswires
September 19, 2017 17:22 ET (21:22 GMT)