U.S. stock indexes finished on higher ground Wednesday, helped by surging energy stocks and positive economic data, even as investors remain fixated on next week’s Federal Reserve meeting.

Uncertainties have grown about the central bank’s monetary-policy plans, but also around how President Joe Biden’s $3.5 trillion budget bill fight in Washington will shake out for Wall Street.

How did stocks trade?

The Dow Jones Industrial Average
DJIA,
+0.68%

climbed 236.82 points, or 0.7%, ending at 34,814.39.

The S&P 500 index
SPX,
+0.85%

rose 37.65 points, or 0.9%, finishing at 4,480.70.

The Nasdaq Composite Index
COMP,
+0.82%

advanced 123.77 points, or 0.8%,closing to 15,161.53.

On Tuesday, the Dow industrials dropped 292.06 points, or 0.8%, to finish at 34,577.57, the S&P 500 index fell 25.68 points, or 0.6%, to 4,443.05 and the Nasdaq Composite fell 67.82 points, or 0.5%, to 15,037.76.

Read: Stock-market traders brace for ‘quadruple witching’

And: The S&P 500 fights to hold above a short-term line in the sand of bullish momentum

What drove the market?

Stocks closed near session highs Wednesday, despite expectations that a choppy market likely will be the new normal until next week’s policy meeting of the Federal Open Market Committee.

“It’s very hard [for the market to rise] in advance of the FOMC meeting,” Kristina Hooper, chief global market strategist at Invesco, said in a Wednesday phone interview.

“These are stomach churning days and we think it’s going to be very hard to gain any type of substantial positive momentum,” Hooper said. The Fed’s FOMC gathering is Sept. 21-22.

September historically tends to be a down month for the U.S. stock market. The Dow was off 1.6% so far this month through Wednesday, marking its worst 10 first trading days in September in a decade, while the S&P 500 was down 0.9% and the Nasdaq Composite was off 0.6% for the same stretch, according to Dow Jones Market Data.

With the help of peak “everything,” including fiscal stimulus from Washington and corporations raking in record profit, the S&P 500 already has powered about 19% higher this year, according to FactSet.

“I think most investors have been expecting a pretty decent market this year because of the reopening of the economy,” said Carin Pai, head of portfolio management, at Fiduciary Trust International, in a phone interview. “But to see almost a 20% return on the market so far this year, that probably has been better than what most people expected.”

Pai now thinks the scuffle in Washington over the Biden administration’s planned $3.5 trillion budget, which aims to bolster American families and the nation’s aging infrastructure, is a focus for investors, namely in terms of how corporate taxes shake out.

House Democrats this week proposed bumping corporate taxes up to 26.5% from the current 21% rate to help fund Biden’s budget, which would be less than the initial 28% level proposed.

“A lot of what originally was proposed has been dialed back to get through reconciliation,” Pai said, of Biden’s ambitious plans to retool the U.S. economy.

Investors also remain sensitive to the fallout from the COVID pandemic, which is threatening to slow global economic growth, as the delta variant has been pushing some hospitals in the U.S. to the brink again, while grim, new milestones have been set elsewhere in the world.

President Biden on Wednesday met with executives at Walt Disney Co.
DIS,
+1.10%
,
Microsoft Corp
MSFT,
+1.68%
,
Walgreens Boots Alliance Inc.
WBA,
+3.94%

and other major U.S. companies to gather support for expanded vaccine mandates announced by the White House last week.

Invesco’s Hooper also said the Fed has done a fairly good job in communicating its intention to taper its $120 billion in monthly purchases of Treasurys and mortgage-backed securities and that Chairman Jerome Powell also has emphasized the decoupling of tapering from eventual interest rate increases.

“The Fed has done a good job messaging but we just don’t have exact dates,” the Invesco strategist said, speculating that the beginning of tapering might come in October if not November.

In economic data, the New York Fed’s Empire State business conditions index surged 16 points to 34.3 in September, the regional Fed bank said Wednesday. Economists had expected a reading of 17.2, according to a survey by The Wall Street Journal. The index stood at 18.3 in August. Any reading above zero indicates improving conditions.

Separately, the import price index dropped 0.3% last month, the government said Wednesday, marking the first decline in 10 months. The drop was mostly attributed to the lower cost of foreign oil and industrial supplies.

And data on U.S. industrial production showed a 0.4% rise in August after a 0.8% gain in the prior month, the Federal Reserve reported Wednesday. The gain is below economist expectations of a 0.5%, according to a survey by The Wall Street Journal.

Which companies were in focus?

Shares of Microsoft Corp.
MSFT,
+1.68%

rose 1.7% Wednesday. The technology giant late Tuesday lifted its quarterly dividend by 11% and the company’s board agreed a new stock buyback plan of up to $60 billion.

Shares of Las Vegas Sands
LVS,
-1.70%

shed 1.7% and those for Wynn Resorts
WYNN,
-6.30%

lost 6.3%, while MGM Resorts
MGM,
-2.49%

shares declined 2.5%. The losses came after casino shares slumped in Macau on indications the local government aims to more closely supervise those companies.

Kansas City Southern
KSU,
+0.53%

formally picks Canadian Pacific
CP,
+0.98%

over Canadian National
CNI,
+2.09%
.
Shares of Kansas City rose 0.5%, CP’s shares gained 1%, while those for CNI climbed 2.1%.

Share of Apple Inc.
AAPL,
+0.61%

gained 0.6% after the iPhone maker debuted a series of updates to its suite of mobile phones and its Apple watch.

Exxon
XOM,
+3.37%

and other energy stocks gained as crude oil prices rose sharply Wednesday as weather in the U.S. Gulf has reduced output.

How did other assets trade?

The yield on the 10-year Treasury note
TMUBMUSD10Y,
1.300%

rose 2.6 basis points to 1.302%. Yields and debt prices move in opposite directions.

The ICE U.S. Dollar Index
DXY,
-0.14%
,
which measures the currency against a basket of six major rivals, fell 0.2% to 92.48.

Oil futures finished higher, with the U.S. benchmark
CL00,
+3.09%

rising 3.1% to settle at $72.61 a barrel. October natural gas
NGV21,
+3.16%

climbed 3.8% to settle at $5.46 per million British thermal units. Gold futures fell, with December gold 
GCZ21,
-0.69%

down$12.30, or 0.7%, to settle at $1,794.80 an ounce.

In European equities, the Stoxx Europe 600 index
SXXP,
-0.80%

closed 0.8% lower, while London’s FTSE 100 index
UKX,
-0.25%

finished the session down 0.3%.

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