"The statement will doubtless keep the option of a December rate hike clearly on the table, but markets will as ever hone in on the 'dot plot", with many expecting the likes of Brainard to perhaps adjust their trajectory lower'. The Dow surged 63 points or +0.28% to finish at 22,331.35.
Ten of the 11 major S&P sectors were higher, led by a 0.59 percent gain in the financial index.
Analysts expect USA central bank policymakers to say at the end of their two-day meeting later on Wednesday that they will reduce monthly bond purchases starting in October, and also leave the door open for an interest rate hike at their December 12-13 meeting.
The Fed also is likely to announce a scheduled reduction of its approximately $4.2 trillion in holdings of bonds and mortgage-backed securities, most of it accumulated in response to the 2007-2009 financial crisis and recession.
Analysts said despite the expected rise in borrowing costs, investors were still piling into equity markets on renewed hopes that Trump can push through the market-friendly policies that helped drive a global rally at the start of the year.
On Monday, safe-haven currencies were trading lower as United Nations leaders were preparing to kick off a meeting on Tuesday to discuss possible solutions on North Korea's nuclear programs, with the USA seeking a peaceful resolution.
U.S. Defense Secretary Jim Mattis hinted on Monday about the existence of military options on North Korea that might spare Seoul from a brutal counterattack. They dropped 1.7% month-on-month compared to expectations of a small 0.3% increase.
President Donald Trump will address the U.N. General Assembly on Tuesday in what is expected to be a speech outlining strategy in dealing with North Korea.
In the U.S. bond market, prices were near flat.
Gold traders and analysts surveyed by Bloomberg turned bearish for the first time in 13 weeks as dollar recovers and US stocks reached record highs.
'The Fed won't want to commit to another rate hike until it is sure that activity is rebounding after the storm disruption'. Energy stocks also rose as oil prices headed higher.
In the NY session, US existing home sales data for August and crude oil inventories data are slated for release.
That would require five of the 16 Fed officials participating in this week's two-day meeting to shift their rate projections lower to change a median that was 1.375 percent as of June, a quarter point above the current target of around 1.125 percent. The euro strengthened to $1.1968 from $1.1945.
- Crude oil futures were higher with West Texas Intermediate crude oil for delivery in October up 0.8% at $50.31 and Brent crude for delivery in November up 0.5% at $55.88.