Wall Street looked set for big gains on Tuesday, the first trading day of 2017, with all eyes on the Dow Jones Industrial Average as it zeroes in on the historical 20,000 mark.

After coming within a hair's breadth of the milestone in December as part of a post-election rally, the Dow will make a fresh attempt at breaching the mark.

The Dow rose 13.4 percent in 2016 - its best performance in three years - registering strong gains in the past two months as investors bet that Presidential-elect Donald Trump would introduce market friendly policies such as tax cuts and simpler regulation.

Dow futures advanced by triple-digit points on Tuesday, helped by a jump in oil prices and upbeat economic data from China.

Brent crude hit an 18-month high of $58.06 after a deal to limit oversupply came into effect on Sunday.

China's factory activity picked up more than expected in December giving the manufacturing sector a solid boost heading into 2017, according to a private business survey.

Traders expect a strong start to the day's trading session, as oil prices and the macro news set the stage for the direction of the equities markets this year.

At the last day of a previous year, the US dollar index was on a tear, notching its best day in nearly three weeks at 103.44, while higher inflation data sent European stocks to a one-year high.

Dow was up 133 points, or 0.67 percent, with 28,004 contracts changing hands. S&P 500 were up 15.25 points, or 0.68 percent, with 153,651 contracts traded.

Nasdaq was up 37.25 points, or 0.77 percent, on volume of 23,297 contracts.