(For a Reuters live blog on U.S., UK and European stock

markets, click LIVE/ or type LIVE/ in a news window)

*

Indexes up: Dow 0.40%, S&P 500 0.40%, Nasdaq 0.55%

*

Circle gains as US Senate passes stablecoin bill

*

Nucor ( NUE ) rises after it forecast Q2 profit above estimates

*

Fed's policy decision due at 02:00 p.m. ET

(Updates with afternoon trading levels)

By Kanchana Chakravarty and Sukriti Gupta

June 18 (Reuters) - Wall Street's main indexes rose on

Wednesday, as the focus shifted from escalating hostilities in

the Middle East to the Federal Reserve's monetary policy

decision expected later in the day.

A nearly 2% fall in oil prices also boosted equities midday

after U.S. President Donald Trump said Iran wanted to negotiate.

Investors will closely monitor Fed Chair Jerome Powell's

comments to gauge how he plans to combat the risk of rising

prices, which remains a dominant concern for the central bank.

The Fed is expected to leave rates unchanged at its meeting.

"Trade tensions have come down somewhat compared to the last

time the FOMC met," but it remains to be seen whether the Fed

will adjust its commentary or expectations in relation to the

inflationary impact of tariffs, said Matt Stucky, chief

portfolio manager for equities at Northwestern Mutual Wealth

Management.

Ahead of the monetary policy decision, money market moves

show traders are pricing in about 47 basis points of rate cuts

by the end of 2025, with a 56% chance of a 25-bps rate cut in

September, according to CME Group's FedWatch tool.

Following strong monthly equity trading in May, the

benchmark S&P 500 index and the Nasdaq were close

to record peaks before the ongoing conflict in the Middle East

made investors risk averse.

The S&P 500 index stood 2.3% below its record level, and the

tech-heavy Nasdaq remained 2.7% lower.

Investors have been anxious over the possibility of a more

direct U.S. military involvement in the Israel-Iran aerial war.

A source familiar with internal discussions said U.S.

President Donald Trump and his team were considering a number of

options, which included joining Israel in strikes against

Iranian nuclear sites.

At 11:36 a.m. ET, the Dow Jones Industrial Average

rose 168.44 points, or 0.40%, to 42,384.24, the S&P 500

gained 23.78 points, or 0.40%, to 6,006.50 and the Nasdaq

Composite gained 107.85 points, or 0.55%, to 19,628.94.

Ten of the 11 major S&P 500 sub-sectors rose. Energy

stocks declined 0.6%, while consumer discretionary led

gains with a nearly 1% rise.

Among megacap stocks, shares of Tesla gained 2.7%.

Shares of networking and custom AI chipmaker Marvell

Technology ( MRVL ) hit a three-month high and were last up 7%.

Shares of stablecoin issuer Circle Internet ( CRCL ) rose

over 16% after the U.S. Senate passed a bill to create a

regulatory framework for dollar-pegged cryptocurrency tokens

known as stablecoins.

Steelmaker Nucor ( NUE ) rose 3.6% following a

second-quarter profit forecast that came above analysts'

estimates.

Initial jobless claims data on Wednesday showed the number

of Americans filing new applications for unemployment benefits

fell last week, but stayed at levels consistent with a further

loss of labor market momentum in June.

Advancing issues outnumbered decliners by a 2.89-to-1 ratio

on the NYSE and by a 2.44-to-1 ratio on the Nasdaq.

The S&P 500 posted 12 new 52-week highs and six new lows,

while the Nasdaq Composite recorded 55 new highs and 71 new

lows.

(Reporting by Kanchana Chakravarty and Sukriti Gupta in

Bengaluru; Editing by Shinjini Ganguli)