Wall Street rose, as did US Treasuries, as the Federal Reserve began its two-day meeting.

The Federal Open Market Committee is not expected to announce an interest rate increase this time, though Wednesday's post-meeting press conference by Chair Janet Yellen will be closely watched for hints on when the central bank will do so.

Traders see a 22 percent chance of a Fed hike Wednesday, according to Bloomberg.

"They want to maintain market expectations for a rate hike in case they want to raise rates in December if conditions warrant one," Sam Bullard, a senior economist at Wells Fargo Securities in Charlotte, North Carolina, told Reuters.

Investors are also awaiting a policy decision from the Bank of Japan at the end of its meeting on Wednesday.

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"Investors have become more comfortable knowing that a Fed rate hike decision will be put off until future meetings, but there is more uncertainty with what Japan will do," Paul Springmeyer, investment managing director at the Private Client Group, US Bank in Minneapolis, Minnesota, told Reuters.

Wall Street advanced. In 3.04pm trading in New York, the Dow Jones Industrial Average gained 0.3 per cent, as did the Nasdaq Composite Index. In 2.49pm trading, the Standard & Poor's 500 Index increased 0.2 per cent.

Treasuries rose, pushing the yield on the benchmark 10-year note three basis points lower to 1.69 percent in New York.

"Investors are seeking affirmation that central banks are going to continue to be somewhat friendly," Jim Davis, regional investment manager for The Private Client Group of US Bank, told Bloomberg.

In the Dow, gains in shares of Merck and those of General Electric, recently trading 1.4 per cent and 1.1 higher respectively, outweighed declines in shares of Exxon Mobil and those of DuPont, down 0.9 per cent and 0.6 per cent respectively.

The US has begun an investigation into how Exxon accounts for the value of its reserves in the wake of the drop in the price of oil the last few years.

They want to maintain market expectations for a rate hike in case they want to raise rates in December if conditions warrant one.

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The Atlanta Fed said its GDPNow model forecast for the US economy will grow 2.9 per cent in the third quarter, down from a 3.0 per cent estimate on September 15.

And in the latest economic data, a Commerce Department report showed US housing starts fell more than expected in August, sliding 5.8 per cent to a 1.14 million annualised rate.

"It looks like housing is taking a bit of a breather in the short term," Jacob Oubina, senior US economist at RBC Capital Markets in New York, told Bloomberg. "I don't think it's anything to be overly concerned about, but I don't think housing's going to be as big a contribution" to growth in the second half of the year, he said.

In Europe, the Stoxx 600 Index ended the session with a decline of 0.1 per cent from the previous close. France's CAC 40 index fell 0.1 per cent. Germany's DAX index rose 0.2 per cent, while the UK's FTSE 100 Index advanced 0.3 per cent.