The Dow finished at a fresh record on Tuesday as markets largely shrugged off the likelihood of a partial US government shutdown due to a stalemate on budget talks.

Major US equity indices veered in and out of negative territory throughout the day before finishing in the black. The Dow Jones was up 0.2 percent at 46,397, a new record.

The S&P 500 gained 0.4 percent to 6,687, while the Nasdaq edged up 0.3 percent to 22,655.

Several federal government operations will freeze beginning at midnight on Tuesday night if there is no breakthrough. Talks between congressional leaders and US President Donald Trump concluded on Monday without progress.

"The market seems to be ignoring the fact that we're looking at a potential shutdown," said Art Hogan of B Riley Wealth Management.

Analysts say a shutdown will not significantly affect the US economy unless it is prolonged. While some activity would be curtailed, the expectation is that there would be a bounce when the government reopened.

But a closure would delay the release of key economic data, including the September jobs report, which is supposed to come out on Friday.

"Usually, markets ignore shutdowns – most last only a few days and investors seem to take a long-term view of the situation, and the short duration of most incidents has little impact on company profits," said Neil Wilson, investor strategist at Saxo.

But "it could be different this time," Wilson warned. "Deep political divisions could see this drag on. A longer shutdown could have serious consequences for stocks."

He pointed to the White House threatening mass firings, while recent changes to economic policy added to uncertainty and raised the prospect of a potential recession.

The latest Dow record extends a heady period for US equities that has seen all three major indices post new records during the third quarter, which ended with Monday's session.

Analysts have pointed to bullishness around artificial intelligence and optimism around US Federal Reserve interest rate cuts as among the factors driving equities higher.

However, there has been some weakening in economic data. The Conference Board's consumer confidence index slipped 3.6 points to 94.2 in September. The figure, the lowest since April, reflects increased worries about inflation. (AFP)