Equities on both sides of the Atlantic rose overnight with the price of oil, while US Federal Reserve policy makers began their two-day meeting.
Investors are bracing for the first Fed interest rate increase since 2006, and will listen closely to comments Chair Janet Yellen makes at a news conference on Wednesday for clues about the path ahead.
The probability the Fed will lift its benchmark rate on Wednesday is 78 percent, according to futures data compiled by Bloomberg. Traders are pricing in less than three increases of 0.25 percentage point in the next year, taking the fed funds effective rate to 0.76 percent from 0.14 percent.
The latest inflation data helped. A Labor Department report showed the consumer price index was unchanged in November, after a 0.2 percent increase in October. Excluding food and energy, the core CPI rose 0.2 percent in November for a third straight month.
"This report should shore up the Fed's confidence in the inflation outlook as the firming in domestic prices will likely serve as a confidence booster in their expectation for inflation to move back towards target in a timely manner," Millan Mulraine, deputy chief economist at TD Securities in New York, told Reuters.
Wall Street gained. In 12.24pm trading in New York, the Dow Jones Industrial Average climbed 1.14 percent. In 12.08pm trading, the Standard & Poor's 500 Index increased 1.21 percent, while the Nasdaq Composite Index gained 1.16 percent.
"Investors seem to be at the crossroads of optimism and concern, with sentiment today leaning toward optimism," Terry Sandven, chief equity strategist at US Bank Wealth Management in Minneapolis, told Reuters.
Oil rose as the recent slide in prices drew some buyers. West Texas Intermediate crude gained 3.2 percent to US$37.50 a barrel, while Brent crude rose 1.7 percent to US$38.57.
"We are seeing nothing unusual about this week's price bounce given the fact that the entire complex had become much oversold based on virtually all of our technical indicators," Jim Ritterbusch of Chicago-based oil consultancy Ritterbusch & Associates said in a note, according to Reuters.
Gains in shares of Exxon Mobil and those of Chevron, last trading 3.1 percent and 3 percent higher respectively, helped propel the Dow higher.
On the flip side, shares of 3M dropped, last 4.8 percent lower for the biggest percentage drop in the Dow, after the company downgraded its earnings outlook.
The cut to its 2015 full-year forecast is "reflecting the realities of a continued slow-growth global economy," the company said in a statement.
In Europe, the Stoxx 600 Index finished the session with a 2.9 percent jump from the previous close. It rose for the first time in six sessions. The UK's FTSE 100 Index climbed 2.5 percent, Germany's DAX Index increased 3.1 percent, while France's CAC 40 Index added 3.2 percent.