New York: Wall Street stocks rose early on Wednesday ahead of an expected Federal Reserve interest rate increase and amid signs Republican congressional leaders were nearing a deal on tax cuts.

The Fed is widely expected to raise the benchmark interest rate and outgoing Fed Chair Janet Yellen will offer clues on the pace future rate hikes at a news conference.

Fresh data 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 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.

The US central bank on Wednesday was poised to raise the benchmark interest rate for the third and final time this year, meaning the focus will now shift to the policy plans for next year.

The widely expected move will come as inflation begins to show some flickers of life − including in a report on consumer prices released earlier Wednesday − but not enough to settle the disagreements among Federal Reserve officials about the near-term threat posed by rising prices.

Fed Chair Janet Yellen was due to hold a press conference after the two-day meeting, which analysts will watch closely for signals about the likely pace of interest rate increases next year.

“After yesterday’s PPI, inflation concerns were more elevated heading into the CPI report but this report did not validate those concerns,” RDQ Economics said in its data analysis, noting that the core rate, which excludes volatile energy and food prices, “continued to be stuck in a rut.” And the Fed’s preferred inflation measure, the Personal Consumption Expenditures price index, remains well below two per cent and shows few signs it will rise soon. The 12-month core PCE is just 1.4 per cent.

Agencies