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The Dow is on track to hit 20,000

Jan 25, 2017, 19:41 IST

Specialist trader Mario Picone wears a &quotDOW Almost 20,000" cap as he works at his post on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., December 15, 2016.Brendan McDermid/Reuters

US stock futures are rallying on Wednesday, with the Dow on track to finally cross 20,000 when trading begins.

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The benchmark S&P 500 is also on pace to open at a record high.

The S&P 500 and the tech-focused Nasdaq clinched new highs Tuesday, but the Dow failed to climb to its record of 19,999.63. It closed within 0.4% of the milestone.

This week is the busiest of earnings-reporting season for S&P 500 companies, and some better-than-expected earnings results have supported the major indexes. On Tuesday, producers of metals and raw materials on the benchmark S&P 500 gained after chemical-maker DuPont beat on earnings.

Several market strategists, including Raymond James' Jeff Saut, have said that the bull market is transitioning this year from being interest rate-driven to being earnings driven. Investors' focus, they argue, is returning squarely to profit as interest rates bottom and US monetary policy continues to tighten.

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The so-called Trump rally that took stocks - and financial stocks in particular - to new highs after the election stalled at the beginning of this year. But in his first week, President Donald Trump pushed the pro-business agenda promised on the campaign trail. He met Tuesday with CEOs from the largest automakers including GM and Fiat Chrysler to urge more domestic manufacturing.

Meanwhile, inflation expectations continue to rise as Trump touts his infrastructure plan. The 10-year yield was up two basis points to 2.491% at 8:56 a.m. ET.

According to a report Tuesday from Kansas City Star and The News Tribune, Trump's administration has compiled a list of 50 infrastructure projects, totaling $137.5 billion in investment. An announcement directing the construction of a border wall with Mexico is expected on Wednesday.

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