US stocks hit record highs as key Fed policy meeting gets underway

• US stocks hit new records on Tuesday as investors eyed start the two-day meeting of the FOMC.
• Investors are bracing for a potential announcement that the Fed will begin tapering asset purchases.
• The yield on the benchmark 10-year US Treasury note fell to 1.549%. Oil and gold prices slipped.

US stocks hit fresh records Tuesday as investors eye the two-day meeting of the Federal Open Market Committee. The policy meeting is expected to culminate in an announcement by the central bank that it will begin tapering its asset purchases this month.

Major US indexes continued their rally after all three closed at records in the previous session. The Dow Jones Industrial Average, closing above 36,000 for the first time, the benchmark S&P 500, and the tech-heavy Nasdaq Composite all gained traction towards the end of the session after trading sideways most of the day.

Here's where US indexes stood at the 4 p.m. ET close on Tuesday:

• S&P 500: 4,630.72, up 0.37%
• Dow Jones Industrial Average: 36,052.63, up 0.39% (138.79 points)
• Nasdaq Composite: 15,649.60, up from 0.34%

"The stock market is remarkably resilient right now and has melted up despite supply chain issues, inflation concerns, rising rates, and a more hawkish Federal Reserve," Greg Marcus, managing director of UBS Private Wealth Management, said in a statement Tuesday.

He did note that while the Fed could begin tapering asset purchases by year-end, he does not expect this to disrupt the stock market's rally.

"The Federal Reserve has been signaling its tapering plans for some time," he added.

Big-name investors and commentators - from Mohamed El Erian to Bill Ackman - have been calling on the central bank to taper bond buying and hike rates to combat rising inflation. The market has been eyeing the November 2 to 3 meeting as the date on which the Fed will make its long-awaited announcement.

Stocks are up about 7% since the start of October when companies began reporting earnings, data from Fundstrat showed. The research boutique added that 81% of all reported results have beaten estimates, with earnings per share coming in above the 6.9% consensus.

Avis Budget Group soared to record highs, jumping as much as 212% in Tuesday's session on the potential for a short squeeze. The car rental company has just over 20% of its shares sold short, according to data from Koyfin.

Tesla fell as much as 5% after its CEO Elon Musk said the electric-vehicle maker has not yet signed a contract with Hertz for its mega-order of 100,000 vehicles.

Meanwhile, Rivian, an electric-vehicle startup backed by Amazon, is targeting a market valuation as high as $60 billion at its hotly-anticipated IPO next week, and will offer a portion of its share to retail investors through SoFi before public trading begins.

The yield on the benchmark 10-year US Treasury note fell to 1.549% from Monday's 1.573%.

In cryptocurrencies, Goldman Sachs said ether could jump 80% to $8,000 in the next two months if it keeps tracking inflation expectations.

Meanwhile, CME Group, the world's largest derivatives marketplace, announced it is expanding its suite of crypto offerings with micro ether futures. The smaller-sized contract, which can be settled on a cash basis, will be introduced on December 6, pending regulatory review.

Oil prices slightly fell ahead of an important meeting of the OPEC+ group of oil-producing countries on Thursday.

West Texas Intermediate crude oil slipped 0.57%, to $83.57 per barrel. Brent crude, oil's international benchmark, also fell 0.27%, to $84.48 per barrel.

Gold slid 0.28%, to $1,786.93 per ounce.