Wall Street advanced overnight as a report showed a gauge of US inflation was unchanged in August, which helped fuel expectations Federal Reserve policy makers might hold on to their plan to keep interest rates low for a "considerable time."
Fed policy makers began their two-day gathering on Tuesday. Fed Chair Janet Yellen, who will hold a press conference at the end of the meeting on Wednesday, is likely to raise interest rates only gradually between 2015 and 2017 as inflation remains muted, according to a Bloomberg survey of economists.
The US producer price index was unchanged last month, following a 0.1 per cent increase in July, according to a Labor Department report. The report was in line with expectations.
"If Yellen is looking for evidence of slack in the economy, and thinking that inflation is too low, then PPI final demand prices fill the bill this morning," Chris Rupkey, chief financial economist at MUFG Union Bank in New York, told Reuters.
In late afternoon trading in New York, the Dow Jones Industrial Average climbed 0.72 per cent, the Standard & Poor's 500 Index rose 0.89 per cent and the Nasdaq Composite Index gained 0.77 per cent.