Global stock prices rose for a second day on Wednesday with the S&P 500 hitting its highest in almost a month as investors awaited the US Federal Reserve decision on whether raise interest rates for the first time in almost a decade.

Brent crude prices jumped 4 per cent on a drop in US crude inventories in the latest week, lifting energy shares and the broader equity market.

"Energy was what gave it the initial spark and the fact the energy rally kept rolling gave people reassurance they could step into other sectors as well," said Peter Jankovskis, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois.

The dollar fell on a surprise dip in domestic inflation in August, which reduced expectations of a US central bank rate increase on Thursday.

Short-term US bond yields held below a near 4-1/2 year high and gold prices rose on the news the US Consumer Price Index fell 0.1 per cent in August.

A Reuters poll released on Wednesday suggested a rate hike remains a close call, although a little more than half the 80 economists surveyed reckoned the Fed will refrain from raising rates.

US money market rates, however, implied traders see a little more than a 1 in 4 chance of a rate increase on Thursday.

Subdued domestic inflation is seen as a critical factor among some economists, together with the recent global market turbulence, that could cause the Fed to stick to its near-zero interest rate policy at its two-day meeting that ends Thursday.

Steady jobs growth and falling unemployment, on the other hand, might be enough to sway US policymakers to raise rates.

The Dow Jones industrial average closed up 140.1 points, or 0.84 per cent, to 16,739.95, the S&P 500 ended up 17.22 points, or 0.87 per cent, to 1,995.31 and the Nasdaq Composite finished up 28.72 points, or 0.59 per cent, to 4,889.24.

The pan-European FTSEurofirst 300 index rose 1.6 per cent at 1,427.55, with buying spurred by the world's No. 1 beer maker's Anheuser-Busch InBev proposal to acquire rival SABMiller.

Tokyo's Nikkei index ended up 0.8 per cent.

The MSCI world equity index, which tracks shares in 45 nations, rose 4.95 points or 1.26 per cent, to 398.65.

US two-year Treasuries' yield was 0.807 per cent, a tad below an earlier peak of 0.819 per cent, which was highest since April 2011.

In the currency market, the dollar index, which tracks the greenback versus a basket of six currencies, fell 0.3 per cent to 95.333.

Brent crude settled up $2.00, or 4.19 per cent, at $49.75 a barrel. US crude settled up $2.56, or 5.74 per cent, at $47.51 per barrel.

Spot gold prices rose $14.15 or 1.28 per cent, to $1,119.15 an ounce. – Reuters