The Dow Jones Industrial Average clinched another record Tuesday but closed just shy of 20000, a milestone it has never reached.
Stocks' postelection rally has sent the blue-chip index within 50 points of the mark on four occasions intraday, including Tuesday, when it got about 12 points away before paring gains.
The Dow industrials finished the day up 91.56 points, or 0.5%, at 19974.62—its 26th record of the year. The S&P 500 added 8.23 points, or 0.4%, to 2270.76 and the Nasdaq Composite gained 26.50 points, or 0.5%, to 5483.94.
U.S. stocks have rallied for six weeks, bolstered by expectations that President-elect Donald Trump's policies would stoke growth and inflation, and loosen regulations on U.S. companies.
Shares of financial and industrial companies have been among the biggest beneficiaries, helping lift the Dow industrials to several fresh records since Nov. 8. Caterpillar Inc. and Goldman Sachs Group Inc. again boosted the Dow industrials on Tuesday.
The Dow Jones Industrial Average is now up 15% so far this year, while the S&P 500 has risen 11% and the Nasdaq Composite is up 9.5%.
"We're in the honeymoon period, and the market will likely continue to rally into Inauguration Day," said Michael Arone, chief investment strategist at State Street Global Advisors. The return of earnings growth in the S&P 500, combined with hopes for expansive fiscal policy and tax reform, are pushing the market higher, Mr. Arone said.
At the same time, Mr. Arone and some others say there is reason to be cautious until it's clear what policies Mr. Trump's administration is able to push through.
"It makes me a little nervous/cautious" to see the Dow at 20000, said Yousef Abbasi, global market strategist at JonesTrading Institutional Services, who added that he's worried because sentiment has gotten "very bullish."
Meanwhile, expectations of a higher-growth, inflationary environment have pressured government bonds since Election Day, sending yields higher. Inflation chips away at the returns of long-dated government debt, which makes them less attractive for investors to hold.
The yield on the 10-year U.S. Treasury note rose to 2.566% Tuesday, up from 2.544% Monday. Yields rise as prices fall.
The prospect of higher growth has also supported the dollar, with the WSJ Dollar Index, which measures the dollar against a basket of 16 currencies, up 0.2% Tuesday after settling at its highest level since October 2002.
The dollar rose 0.6% against Japan's yen on Tuesday, while Japan's Nikkei Stock Average added 0.5% to close at its highest level this year.
Earlier, the Bank of Japan left its monetary policy unchanged as expected, even as it raised its assessment of the economy. Bank of Japan Gov. Haruhiko Kuroda said Tuesday that long-term interest rates were at "appropriate" levels, and that he didn't see the yen's recent fall against the dollar as a problem.
The euro extended its losing streak, meanwhile, falling 0.1% to $ 1.0393. Data Tuesday showed the eurozone's current-account surplus widened in October.
The Stoxx Europe 600 rose 0.5% to its highest level of the year. European stocks are now 19% above their lows in February, on track to close out 2016 1.2% below where they started.
—Corrie Driebusch contributed to this article.
Write to Akane Otani at akane.otani@wsj.com and Riva Gold at riva.gold@wsj.com
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