Recent polls showed centrist Emmanuel Macron would beat anti-EU candidate Marine Le Pen in a runoff on May 7, reducing risk the euro zone's second-biggest economy would follow Britain to leave the regional economic bloc.

Some traders had feared that a run-off between Le Pen and far-left Jean-Luc Melenchon, who is also known for his anti-EU stance, would spell the end of the European Union and the euro. The possibility of such a disruptive outcome for the European economy could prevent the US central bank from raising rates further.

With a likely Macron victory next month, the Fed may be able to stick its intention to raise rates two more times in 2017 following its quarter-point increase in March, analysts said.

In early trading on Tuesday, federal funds futures implied traders priced in a nearly 71 percent chance the Fed would raise rates to a range of 1.00-1.25 percent at its June 13-14 policy meeting, versus 67 percent late on Monday and about 53 percent on Friday, CME Group's FedWatch tool showed.

Fed funds futures suggested traders saw a 51 percent chance the Fed would hike rates to 1.25-1.50 percent at its Dec. 12-13 meeting, compared with 48 percent on Monday and roughly 38 percent on Friday, according to CME's FedWatch.