Wall Street rose overnight having pared some of its earlier gains with oil, as investors relished the prospect of fewer US interest rates this year.

On Tuesday, Federal Reserve Chair Janet Yellen signalled that the central bank will "proceed cautiously" in raising rates, citing "global economic and financial developments."

Wall Street rose. In 12.55pm New York trading, the Dow Jones Industrial Average gained 0.37 percent, while the Nasdaq Composite Index rose 0.36 percent. In 12.40pm trading, the Standard & Poor's 500 Index added 0.37 percent.

"You have got the follow through from the Fed," Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana, told Reuters. "They are taking one of the fears basically off the table at this point in terms of rising interest rates."


Watch: Fed forsees gradual pace of rates hikes:

Federal Reserve Chair Janet Yellen said Tuesday that the Fed still envisions a gradual pace of interest rate increases in light of global pressures that could weigh on the U.S. economy.

Indeed, odds of a US rate increase next month fell to zero Tuesday, from 10 percent a week ago, while the probability of a hike in June slid to 28 percent, from 46 percent a week earlier, according to futures trading tracked by Bloomberg.

The Dow rose, led by advances in shares of Visa and those of 3M, up 1.8 percent and 1.5 percent respectively.

Shares of Lululemon Athletica jumped, up 9.8 percent in New York in early afternoon trading, after the company reported fourth-quarter profit that surpassed analysts' estimates.

Still, Wall Street gave up some of its initial gains-earlier in the session the S&P 500 had advanced more than 0.8 percent-with the price of oil after an Energy Information Administration report showed US crude inventories rose 2.3 million barrels in the last week.

While it was lower than analysts had expected, it did not help to ease concern about the buildup.

"The data poses a bit of a conundrum, in that crude stocks still increased so much despite strong refining runs and an apparent drop in imports," Matt Smith, director of commodity research at New York-based energy data provider ClipperData, told Reuters.

Brent crude's front-month contract traded 1 percent higher at US$39.54 a barrel at about noon in New York, after earlier having risen as high as US$40.61.

The US jobs market keeps offering signs of strength. The latest ADP Research Institute data showed private payrolls rose by 200,000 this month, following a revised 205,000 increase in February.

In Europe, the Stoxx 600 Index ended the day with a 1.3 percent gain from the previous close. The UK's FTSE 100 Index climbed 1.6 percent, as did Germany's DAX Index, while France's CAC 40 Index rallied 1.8 percent.

Shares of Anglo American soared 11.8 percent in London. Berenberg Bank said the miner seems to be positioning itself to attract a large corporate buyer, Bloomberg reported.
Meanwhile, a gauge of euro-zone economic confidence fell more than expected to the lowest level in more than a year, with a European Commission report showing an index of executive and consumer confidence fell 103.0 in March, down from a revised 103.9 the previous month.