Wall Street higher as oil recovers; Fed in focus

Traders have priced in more than a 90% chance of a quarter point rate increase

US stocks opened slightly higher on Wednesday as oil prices rebounded and investors counted down to the conclusion of the Federal Reserve's two-day meeting, where the central bank is widely expected to raise rates for the first time this year.

The Fed is scheduled to release its latest policy statement along with updated economic forecasts at 2 pm ET (1800 GMT). Fed Chair Janet Yellen is due to hold a press conference half an hour later.

Traders have priced in more than a 90 per cent chance of a quarter point rate increase, according to Fed fund futures.

Attention is turning to whether the US central bank will signal an even faster pace of monetary tightening this year than the current three rate hikes that it projected at the December policy meeting.

The US economy has been strengthening, with the labor market nearing full employment and inflation perking up. Markets are also betting on a potential economic boost from President Donald Trump's proposed fiscal policies.

"A rate hike now and another in June would certainly leave the door open to four increases and stop the Fed falling behind the curve if the US economy does respond strongly to either Trump's stimulus plans - should they be enacted this year - or the prospect of them," said Craig Erlam, senior market analyst at Oanda in London.

The S&P 500 has risen 10.6 per cent since the election, spurred by optimism over Trump's policies but the major indexes have been stuck in a tight trading range this month following a slew of hawkish comments from Fed members.

At 9:33 am ET the Dow Jones industrial average was up 31.03 points, or 0.15 per cent, at 20,868.4 and the S&P 500 was up 5.04 points, or 0.21 per cent, at 2,370.49.

The Nasdaq Composite was up 10.63 points, or 0.18 per cent, at 5,867.44.

All 11 major S&P sectors were higher, with the energy index's 0.79 percent rise leading the gainers.

Oil prices rebounded on Wednesday, lifted by a surprise drawdown in US inventories and data from the International Energy Agency suggested Opec cuts should create a crude deficit in the first half of 2017.

Shares of oil majors Exxon and Chevron were up about 0.4 per cent.

Investors were also assessing data on US retail sales, which registered their smallest increase in six months in February.

Other data showed consumer prices barely rose in February but the underlying trend remained consistent with rising inflation. The Labor Department said its Consumer Price Index ticked up 0.1 per cent last month, after jumping 0.6 per cent in January.

Twitter was down one per cent at $15.16 after a number of prominent accounts on the microblogging website were hacked.

Advancing issues outnumbered decliners on the NYSE by 2,052 to 490. On the Nasdaq, 1,481 issues rose and 609 fell.

The S&P 500 index showed 23 new 52-week highs and one new low, while the Nasdaq recorded 52 new highs and 11 new lows.