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The entrance of the New York Stock Exchange is seen on Wall Street in New York City on September 30. / Source: Reuters-Yonhap

All three major U.S. stock indexes closed higher for a third consecutive session on Tuesday, with the Dow Jones Industrial Average ending at a record high, as investors looked past the looming government shutdown and bet on potential interest rate cuts by the Federal Reserve.

The Dow Jones gained 81.82 points, or 0.18%, to finish at 46,397.89, a new all-time closing high. The S&P 500 rose 27.25 points, or 0.41%, to 6,688.46, while the Nasdaq Composite added 68.86 points, or 0.31%, to 22,660.01.

Markets opened weaker on shutdown concerns after President Donald Trump warned at a White House event that his administration “will probably have to go through a shutdown” as he rejected Democratic budget demands.

But investors grew confident the disruption would be short-lived, noting past shutdowns had ended quickly. Analysts said expectations that the Fed may respond with rate cuts fueled the market rebound.

“An extended shutdown increases downside risks to growth and raises the likelihood the Fed will take more accommodative measures,” said Elias Haddad, senior market strategist at Brown Brothers Harriman.

Healthcare, materials and technology stocks advanced 2.45%, 0.55% and 0.86% respectively. Financials slipped 0.45% as consumer sentiment weakened, while energy stocks fell 1.07% on a sharp drop in oil prices.

Pfizer shares surged 6.83% after securing a three-year tariff waiver from the U.S. government in exchange for a $70 billion investment pledge.