(Sharecast News) - US stock futures were inching higher on Tuesday with the Dow expected to set new record highs as investor attention remains firmly fixed on the two-day Federal Open Market Committee meeting, which begins later on.

By 0521 in New York, futures on the Dow were up 0.2% on Monday's all-time closing high of 41,622.08. S&P 500 futures were rising 0.3% while the Nasdaq was showing a 0.5% gain, reversing much of the previous day's losses.

A 25-basis point reduction in the Federal Funds Rate is priced into markets already, ahead of the conclusion of the Fed policy meeting at 1400 ET Wednesday, though investors are uncertain whether the central bank will go ahead with a bigger cut in light of worsening economic conditions in recent months.

As for Tuesday session, the major economic data release will be retail sales figures for August due at 0830 ET, which are expected to show that sales growth slowed to 0.2% from 1.0% in July.

"Coming at a time where the Fed appear to be more data dependent than ever, a worsening level of consumption could yet help secure a 50-basis point cut given how reliant the US economy is on domestic demand," said Joshua Mahony, chief market analyst at Scope Markets.

The US dollar was continuing to weaken ahead of the Fed decision, with the dollar index down 0.2% at 100.60, close to its lowest levels of the year and 6% lower than the yearly high of 106.26 reached in April.

Industrial production data is also due out at 0915 ET, followed by the NAHB housing market index at 1000 ET.

In company news, Intel futures were surging on the back of news that it is demerging its foundry business, expanding its partnership with Amazon's cloud division, and receiving $3bn in federal grants to make chips for the Pentagon.

Microsoft was also on the up after unveiling plans to buy back $60bn of stock as it lifted its quarterly dividend by 11%