US stocks add to records ahead of Fed announcement

NEW YORK — Wall Street stocks rose early on Wednesday ahead of an expected Federal Reserve (Fed) interest rate increase and amid signs Republican congressional leaders were nearing a deal on tax cuts.

The Fed was widely expected to raise the benchmark interest rate and outgoing Fed Chair Janet Yellen was expected to offer clues on the pace future rate hikes at a news conference. Fresh data on Wednesday showed inflation rose above the Fed's target, but that was driven by higher gasoline prices, while other sectors showed signs of weakness.

About 20 minutes into trading the Dow Jones Industrial Average was at 24,558.71, up 0.2 per cent.

The broad-based S&P 500 also gained 0.2 per cent to 2,669.13, while the tech-rich Nasdaq Composite Index advanced 0.4 per cent to 6,892.60.

The Dow and S&P 500 closed at records on Tuesday.

Analysts are watching Washington for updates on how congressional Republican leaders are doing in efforts to meld the House and Senate tax cut bills into a final version that President Donald Trump can sign. 

Republicans are expected to accelerate those efforts after Tuesday's upset election victory in Alabama cut into the party's narrow majority in the Senate. Democrat Doug Jones is expected to be seated in early January, giving an impetus for Republicans to get tax bill to Trump before the end of the year.

The Dow's biggest mover was Caterpillar, which jumped 1.8 per cent following an update that showed solid gains in worldwide machine sales in each of the last three months. November sales rose 26 per cent compared with the year-ago period.