Wall Street continued its record-setting streak while the US dollar also gained after Federal Reserve Chair Janet Yellen signalled further interest rate increases ahead.

"At our upcoming meetings, the committee will evaluate whether employment and inflation are continuing to evolve in line with these expectations, in which case a further adjustment of the federal funds rate would likely be appropriate," Yellen told the Senate Banking Committee.

The Federal Open Market Committee begins its next two-day policy meeting on March 14.

"I can't tell you which meeting it would be," Yellen said, including specifying "whether it's March or May or June," according to Reuters.

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"Waiting too long to remove accommodation would be unwise, potentially requiring the FOMC to eventually raise rates rapidly, which could risk disrupting financial markets and pushing the economy into recession," Yellen noted.

Yellen warned that changes in fiscal policy or other economic policies could potentially affect the economic outlook.

"Of course, it is too early to know what policy changes will be put in place or how their economic effects will unfold," she noted. "While it is not my intention to opine on specific tax or spending proposals, I would point to the importance of improving the pace of longer-run economic growth and raising American living standards with policies aimed at improving productivity."

Wall Street moved higher. In 1.30pm trading in New York, the Dow Jones Industrial Average added 0.3 per cent, while the Nasdaq Composite Index gained 0.2 per cent. In 1.14pm trading, the Standard & Poor's 500 Index increased 0.3 per cent.

The three benchmarks touched fresh record highs. The Dow rose to 20,475.89, while the S&P 500 climbed to 2,334.56, and the Nasdaq reached 5,778.45.

"This doesn't mean they will move in March, but the Fed wants to have the option to move," Omer Esiner, chief market strategist at Commonwealth Foreign Exchange in Washington, told Reuters. "The market seems to be under-pricing a upcoming rate hike."

The Dow climbed, led by gains in shares of Goldman Sachs and those of JPMorgan Chase, recently up 1.5 per cent and 1.3 per cent respectively. Apple shares touched a record high US$134.93 amid bets its next iPhone model will bolster sales.

US Treasuries declined, pushing the yield on the 10-year note five basis points higher.

In Europe, the Stoxx 600 Index ended the session with a 0.1 per cent increase from the previous close, underpinned by gains in car makers. The UK's FTSE 100 Index slipped 0.1 per cent, and Germany's DAX Index edged 0.02 per cent lower.

France's CAC 40 Index added 0.2 per cent, bolstered by shares in Peugeot.

PSA Group, the maker of Peugeot and Citroen cars, is exploring an acquisition of General Motors' European business, Bloomberg reported.