Market Snapshot: Dow inches closer to 20,000, even with Fed rate hike in view

The Dow Jones Industrial Average showed no sign of breaking its record run on Tuesday, even as investors started to brace for a U.S. interest rate hike this week.

Futures for the blue-chip benchmark YMZ6, +0.34%  climbed 67 points, or 0.3%, to 19,790. If the Dow opens higher and keeps its gain through the session, it will log its seventh consecutive record close. The benchmark on Monday bucked a negative trend across the U.S. stock markets and closed at an all-time high.

“U.S. markets are still celebrating the idea of a pro-business administration coming into the White House, but the accompanying inflationary aspects don’t seem to be fully accounted for. We like to think markets are really efficient, but it’s perhaps at times like this that you realize how fallible an assumption like that can be,” said Tony Cross, market analyst at TopTradr, in emailed comments.

Read: 5 things to know about the Dow’s attempt to rally to 20,000 and beyond

“We really do seem to be off the chart here, and I can’t see what justifies further upside for the Dow, especially on the basis we may see a hawkish statement from the Fed tomorrow,” he added.

Meanwhile, futures for the S&P 500 index ESZ6, +0.27%  gained 6.10 points, or 0.3%, to 2,256.50, while those for the Nasdaq-100 index NQZ6, +0.31%  added 15.50 points, or 0.3%, to 4,881.75.

Both the S&P 500 index SPX, -0.11%  and Nasdaq Composite COMP, -0.59%  ended lower on Monday, with investors appearing reluctant to push shares higher ahead of the Fed meeting.

Fed meeting: The central bank kicks off its two-day policy-setting meeting on Tuesday and will deliver its rate announcement on Wednesday at 2 p.m. Eastern Time. The bank is widely expected to raise its benchmark rate by 25 basis point, so the big question for traders is how hawkish or dovish the statement will be.

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“Stock traders appear to be betting on a dovish Fed,” said Ipek Ozkardeskaya, senior market analyst at London Capital Group, in emailed comments.

“The FOMC will certainly attempt to temper the Fed hawks at this week’s meeting, given that they have massively taken over the market since Donald Trump’s presidential victory. In this context, the Dow could attract fresh buyers, even if it is trading at the historical high levels,” she said.

Read: Look for the Fed to hike rates and to ignore the elephant in the room

The dollar inched higher against most other major currencies ahead of the rate decision.

In other economic news on Tuesday, the NFIB small-business index jumped by the largest monthly amount in more than seven years in November on optimism Trump’s administration will spur an increase in business activity.

At 8:30 a.m. Eastern Time, the import-price index for November is due.

Movers and shakers: U.S.-listed shares of Unilever PLC UL, +0.15% ULVR, +1.41%  climbed 1.3% ahead of the bell after Jefferies lifted the consumer products company to buy from hold.

Inovalon Holdings Inc. INOV, -1.33%  sank 35% in thin premarket trade after the data-analytics company late Monday slashed its yearly guidance.

U.S.-listed shares of Anheuser-Busch InBev SA BUD, +0.14% ABI, +1.55%  added 1.2% before the bell after news Asahi Group Holdings Ltd. 2502, -4.61%  will buy five Eastern European beer brands from the brewer.

Apple Inc. AAPL, -0.57%  may also move. The Wall Street Journal reported that the tech giant is interested in investing in a $ 100 billion fund being raised by Japanese internet and telecommunications giant SoftBank Group Corp. 9984, -0.13%  .

Wal-Mart Stores Inc. WMT, +2.27%  was also in focus. U.K. supermarket chain Asda, a subsidiary of Wal-Mart, saw its market share fall to 15.3%, from 16.2% for the comparable 12 weeks.

Read: Wal-Mart shares are poised for more gains, but could Trump spoil the party?

Other markets: Asian markets closed slightly higher. Data out of China showed the country’s retail sales and industrial output rose at a faster-than-forecast pace in November.

Stocks in Europe climbed in all major markets, rebounding from small losses on Monday.

Oil prices moved higher after the International Energy Agency lifted its demand forecasts for 2016. Metals were mostly lower.

Read: Will oil output cuts work? Watch these 7 things

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