Wall Street was on track for a second day of gains on Tuesday as energy stocks rose in tandem with recovering oil prices, and a day before a widely expected interest-rate hike by the Federal Reserve in nearly a decade. Traders see an 83 percent chance of a lift-off this week, according to the CME Group's FedWatch program, but investors are concerned about the pace of future rate hikes.
"Investors seem to be at the crossroads of optimism and concern, with sentiment today leaning toward optimism," said Terry Sandven, chief equity strategist at US Bank Wealth Management in Minneapolis. Bank stocks rose on the expectation of improving interest income from higher rates, with Goldman Sachs' 2.6 percent rise providing the biggest boost to the Dow.
J.P. Morgan, Morgan Stanley, Citigroup and Bank of America were up about 2.5 percent. Scott Brown, chief economist at Raymond James in St. Petersburg, Florida, said he expects trading to be slightly volatile as traders set up positions ahead of the Fed's statement, adding that a rate hike was largely priced in. "It will really be a shock to the market if (the Fed) didn't move," Brown said. At 10:53 am ET (1553 GMT), the Dow Jones industrial average was up 203.64 points, or 1.17 percent, at 17,572.14, the S&P 500 was up 25.32 points, or 1.25 percent, at 2,047.26 and the Nasdaq Composite index was up 62.03 points, or 1.25 percent, at 5,014.26.