Traders work on the floor at the New York Stock Exchange. Brendan McDermid | Reuters

The S&P 500 is closing in on its all-time high, and is likely to sail past it, as long as the Fed continues to promise lower interest rates, and there is no irreparable divide between the U.S. and China on trade. Stocks were rising Tuesday as markets anticipated a dovish Fed on Wednesday, and as the European Central Bank's outgoing president, Mario Draghi, laid out a path for the ECB to loosen its own already lax monetary policy. The market also gained a boost after President Donald Trump said he had a good discussion with China President Xi Jinping, and the two would have an extended talk at the G-20 meeting in late June.

The Fed began its two-day meeting Tuesday, and was widely expected by economists to lay the groundwork for a July interest rate cut with new forecasts on rates and the economy, and a more dovish post-meeting statement Wednesday. "I think the equities market will continue to grind higher, save [Fed Chair Jerome] Jay Powell and the Fed not expressing something that is in line ... or reflecting the market's anticipated dovishness," said Rick Rieder, BlackRock's global CIO of fixed income. Rieder is also lead portfolio manager of BlackRock's Global Allocation Fund, the firm's largest mutual fund. "When the Fed first cuts rates, they tend to be faster. They tend to be more aggressive," said Rieder. He said he expects to see a 50 basis point, or half percentage point, rate cut in July and another rate reduction in September. The was up about 1%, at 2,917 on Tuesday, just about 1% from its all-time closing high of 2,945, reached April 30. Its all-time intraday high was 2,954 on May 1. The Dow, meanwhile, ended up 1.4% or 353 points, to 26,465, about 1.3% from its closing high of 26,828. "What's the market response to the Fed? It may be happening today. We're going to hit the all-time high. Whether we hit it today or next week, we think the [S&P 500] can hit 3,025 by the by the end of the year. That's another 3 or 4%, and that puts us in the clear optimistic camp," said Jonathan Golub, chief U.S. equity strategist at Credit Suisse. "The market is just ripping. We think it's going to be smoother between now and the end of the year, and we think we're front-running the move." Golub said for the past five or six years, he's seen rough spots in the market as buying opportunities. "We're not saying that now. We're not saying the market's going to fall apart, but we're just saying lower rates and lower inflation are not the elixir everyone thinks they are," the strategist said.

He said as the market focus shifted to the Fed, trade has become less of a concern in the last couple weeks, and there is an expectation that there will be some sort of agreement. "But if I was really optimistic central banks were going to to really drive this, I would be increasing my numbers. ... It's not that I'm pessimistic, but a guy who has been the most bullish strategist. In the last five or six years, we were right on that," said Golub. "I'm a little more balanced, in my view than we've been in a long time. For the past month, we've been highlighting decelerating data."

Investors still negative