U.S. equities rose on Tuesday as the Federal Reserve kicked off a two-day monetary policy meeting. The Dow Jones industrial average posted its 41st record close of the year, rising 39.45 points to 22,370.80. Verizon and Goldman Sachs contributed the most to the gains. The gained 0.1 percent to a record of 2,506.65, with telecommunications and financials leading advancers. The Nasdaq composite advanced 0.1 percent and also posted a record close of 6,461.32. The three major indexes had posted intraday highs on Monday.

Major U.S. Indexes

The Fed is not expected to raise rates following its meeting. However, many market participants believe the central bank will announce the unwinding of its $4.5 trillion portfolio. "They've kind of laid out the principles for the balance-sheet reduction process, but I expect to see that more formalized," said Eric Stein, co-director of global income at Eaton Vance. The U.S. central bank amassed most of its massive balance sheet as it tried to bring the economy back to life following the financial crisis. "This is going to be unprecedented and every central bank in the world will be watching how" the Fed accomplishes this, said Quincy Krosby, chief market strategist at Prudential Financial. "But investors will also be looking for clues about whether we'll get another rate hike in December." The Fed has already raised interest rates twice this year and it expects to hike once more before year-end. Market expectations for a December rate hike rose to 58.3 percent on Tuesday on strong imports data.

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