GLOBAL MARKETS-Stocks hit record high, dollar stabilizes ahead of Fed rate call

(Updates with open of US markets)

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Dollar steadies after sharp drop

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S&P 500 crosses 7,000 level

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Fed meets against backdrop of pressure on Powell

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Meta, Tesla report earnings after the close

By Chuck Mikolajczak

NEW YORK, Jan 28 (Reuters) - Global stocks climbed to an intraday record high for a third straight session, while the U.S. dollar showed signs of stabilizing after a sharp drop in the prior session ahead of a Federal Reserve interest rate decision on Wednesday.

U.S. stocks were ?higher in the early stages of trading on Wall Street, with the S&P 500 crossing 7,000 for the first time ahead of earnings from megacap companies Microsoft (MSFT), Tesla and Meta ?Platforms after the closing bell, while results from Apple (AAPL) are due on Thursday.

"These big round numbers can be difficult psychological tests for ?the market. So certainly from a technical analysis perspective, we think it's a very positive ?sign," said Jeff Buchbinder, chief equity strategist ?for LPL Financial in Boston.

The Dow Jones Industrial Average rose 3.45 points, or 0.01%, to 49,006.97, the S&P 500 rose 16.20 points, or 0.23%, to 6,994.80 and the ?Nasdaq Composite rose 124.60 points, or 0.53%, to 23,943.34.

MSCI's gauge of stocks ?across the globe rose 3.01 points, or 0.29%, to 1,054.17 after climbing to an intraday record of 1,055.04, marking its third straight intraday record.

The index is on track for a sixth straight advance, its longest streak ?of gains this year.

The pan-European STOXX 600 index fell 0.67%, weighed ?by a drop ?of about 7% in LVMH after the Louis Vuitton and Tiffany owner reported quarterly results, but CEO Bernard Arnault said he was cautious about the year ahead.

FX WATCH

The dollar showed signs of steadying, after its biggest daily percentage drop ?since August 1, as U.S. President Donald Trump on Tuesday seemed to shrug off its recent weakness that sent the greenback to a four-year low.

The dollar has stumbled recently on factors including expectations of continued Fed rate cuts later this year, tariff uncertainty, policy volatility, including threats the central bank's independence, and rising fiscal deficits, all of which have dented investor confidence in U.S. economic stability.

The dollar index, which measures the greenback against a basket of currencies, rose 0.32% to 96.22, with the euro down 0.61% at $1.1968 after breaching the $1.20 ?mark following Trump's ?comments.

European Central Bank policymakers flagged increasing concerns over the euro's quick appreciation against the dollar, warning that it could drag inflation down even as price growth is already set to undershoot the ECB's 2% target.

The Fed is expected to ?hold rates steady at a meeting overshadowed by a Trump administration criminal investigation of its chief Jerome Powell, an evolving effort to fire Fed Governor Lisa Cook, and the nomination of a successor to Powell in May.

Investors see the pause in rate cuts lasting beyond Powell's final meetings in March and April.

Against the Japanese yen, the dollar strengthened 0.39% to 152.78, while sterling weakened 0.34% to $1.3798.

The United States has a strong dollar policy and that means setting the right fundamentals, U.S. Treasury Secretary Scott Bessent said, while denying that the U.S. was intervening in currency markets to support the yen ?after the Japanese currency saw a surge against the greenback last week.

Dollar weakness continued to support other commodities, helping gold hit a record above $5,300 an ounce. U.S. crude rose 1.31% to $63.21 a barrel and Brent rose to $68.26 per barrel, up 1.02% on the day after hitting a four-month high of $68.53.

(Reporting by Chuck Mikolajczak, additional reporting by Pranav Kashyap ?and Twesha Dikshit in Bengaluru, Dhara Ranasinghe in London and Tom Westbrook in Singapore; Editing by Timothy Heritage, Jan Harvey and Alexander Smith)