By Caroline Valetkevitch

NEW YORK, Jan 6 (Reuters) - Major stock indexes including the Dow Jones Industrial Average and European shares rose to record highs on Tuesday, while the dollar edged higher as investors focused on key market data this week that could help gauge the outlook for Federal Reserve policy.

Oil prices fell as investors assessed expectations of ample global supply this year against uncertainty around Venezuelan crude output.

Venezuela's main opposition leader, Maria Corina Machado, has vowed to return home quickly, praising U.S. President Donald Trump for toppling her enemy, Nicolas Maduro, and declaring her movement ready to win a free election.

The White House said on Tuesday that Trump and his team are discussing options for acquiring Greenland and the use of the U.S. military in furtherance of the goal is "always an option."

"The market's reaction to the geopolitical situation in Venezuela was well taken, but (reports that) the White House was thinking about taking Greenland with force... could cause a bit of a roadblock," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

"We had new record highs today, and the momentum keeps building in the marketplace. It's roughly due to the January effect," he said, referring to an early-year buying pattern in stocks. If labor data later this week is weaker than expected, that could help expectations for U.S. rate cuts, he added.

STOCK INDEXES CLIMB

On Wall Street, chip stocks rose on renewed artificial intelligence optimism.

Shares of Exxon Mobil were down 3.4% on Tuesday. On Monday, the raid on Venezuela had provided a boost to big U.S. oil companies' stock as investors bet Washington would give U.S. firms access to Venezuela's oil reserves. Trump's administration plans to meet executives from oil companies later this week to discuss boosting production in Venezuela. 

The Dow Jones Industrial Average rose 484.90 points, or 0.99%, to 49,462.08, the S&P 500 rose 42.77 points, or 0.62%, to 6,944.82 and the Nasdaq Composite rose 151.35 points, or 0.65%, to 23,547.17.

MSCI's gauge of stocks across the globe was last up 7.13 points, or 0.69%, at 1,035.15 and reached a record high during the session.

The pan-European STOXX 600 index ended up 0.58% and hit a record high. Indexes in Germany and Spain hit record highs, as investors remained confident in the economic outlook despite escalating geopolitical tensions.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.17% to 98.56.

U.S. ECONOMIC DATA TO SET MARKET TONE

The upbeat mood in markets was driven by expectations for U.S. interest rate cuts. Traders were focused on a U.S. monthly employment report, due on Friday, which will influence the market's monetary policy expectations. Financial markets are pricing in two Fed rate cuts this year, according to LSEG data.

Fed Governor Stephen Miran, whose term at the U.S. central bank ends later this month, said aggressive U.S. interest rate cuts are needed this year to keep the economy moving forward.

The yield on benchmark U.S. 10-year notes rose 1.2 basis points to 4.175%, from 4.163% late on Monday.

U.S. crude fell $1.19 to settle at $57.13 a barrel and Brent declined $1.06 to settle at $60.70.

Gold was last down slightly after rising sharply in the previous session. Spot gold fell 0.12% to $4,491.77 an ounce. 

Copper soared to an all-time high and nickel leapt more than 9% to an 18-month peak as supply concerns fueled an early-year rally in industrial metals.

(Reporting by Caroline Valetkevitch in New York, with additional reporting by Elizabeth Howcroft in Paris; Editing by Hugh Lawson, Aidan Lewis, Rod Nickel and Nia Williams)