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ENERGY, FINANCIAL STOCKS LIFT WALL STREET AS FED MEETING LOOMS

Wall Street's main indexes are higher early on Tuesday with energy and financial stocks in the lead, while investors weigh the impact of the Middle East conflict on energy costs, putting inflation risks back in focus ahead of the Federal Reserve's two-day meeting.

The Federal Reserve is likely to leave borrowing costs unchanged at the end of its two-day meeting on Wednesday. But investors are pricing in a hawkish outlook as short-term Treasury yields edge up and rate futures suggest just one 25-basis-point cut towards the end of the year, according to LSEG-compiled data, down from around two before the war.

All S&P 500 .SPX sectors are higher with Energy .SPNY and Financials .SPSY, both up around 1.3% or more, posting the biggest gains.

NYMEX Crude Futures CLc1 are rising more than 1%. With this, the S&P 500 Energy sector .SPNY is on track for a record closing high.

Under the surface, small caps .RUT, big banks .SPXBK, mid caps .MID, gold/silver miners .XAU, and transports .DJT are among outperformers on the day.

Utilities are also showing life. The Dow Jones Utility Average .DJU has hit a fresh record intraday high, and is on track for a record close. The S&P 500 Utilities sector .SPLRCU is nearing its highs and it's now down less than 1% from its record close.

Here is a snapshot of where markets stood around 10:05 a.m. EDT:

(Terence Gabriel)

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EARLIER ON LIVE MARKETS:

LEVERAGED ETF FLOWS SIGNAL TUG-OF-WAR BETWEEN NASDAQ BULLS AND BEARS CLICK HERE

IRAN WAR A MANAGEABLE SHOCK, SAY SOCIETE GENERALE CLICK HERE

WAR DENTS INVESTOR SENTIMENT TOWARDS EUROPEAN STOCKS- BOFA SURVEY CLICK HERE

EUROPEAN STOCKS PRETTY CALM CLICK HERE

EUROPE BEFORE THE BELL: OIL UP, SHARES DOWN CLICK HERE

MORNING BID: CENTRAL BANKS GIRD FOR OIL SHOCKS AS RBA VOTES 5-4 TO HIKE CLICK HERE

(Terence Gabriel is a Reuters market analyst. The views expressed are his own)