Investors were expected to remain cautious until the Fed announces its decision on Thursday.
The Dow Jones rose 140.1 points to 16,739.95, while the S&P 500 added 17.22 points to 1,995.31. The Nasdaq was up 28.72 points at 4,889.24.
Figures released on Wednesday showed consumer prices fell 0.1% in August.
Prices were up 0.2% from a year earlier, indicating that inflationary pressures within the US economy remain weak.
Analysts think the Fed's decision is finely-balanced, as while inflation is weak, the economy is growing and the unemployment rate has fallen to 5.1%.
"You can make a strong case either way for the Fed to begin raising interest rates or waiting," Ryan Sweet, a senior economist at Moody's Analytics, told Reuters.
"The prudent risk management approach would argue for them to hold off, but if the Fed was really data dependent there is a very strong case to raise rates on Thursday."
Among individual stocks, Anheuser-Busch InBev rose 6.8% after it said it had made a takeover approach for rival brewing firm SABMiller.
FedEx shares fell 2.8% after the delivery company cut its full-year earnings forecast.
The company predicted earnings per share of $10.40-$10.90 for the year to 31 May, down from a previous forecast of $10.60-$11.10.
(Close): US markets closed higher as the Federal Reserve begins its two-day meeting which will discuss whether to raise interest rates.