(Updates with US afternoon trading)

* Fed expected to keep rates unchanged

* Financials rebound from prior losses

* Delta and American raise revenue guidance

* S&P 500 +0.43%, Nasdaq +0.58%, Dow +0.29%

By Noel Randewich and Johann M Cherian

March 17 (Reuters) - Wall Street rose on Tuesday, with

gains in Delta Air Lines ( DAL ) and other travel stocks, while the

Federal Reserve began its two-day policy meeting amid investors'

worries about high oil prices and the Middle East conflict.

Airlines and travel stocks rebounded from losses in recent

weeks related to the U.S. and Israeli attack on Iran and surging

energy prices.

Delta Air Lines ( DAL ) rallied 6.9% and American Airlines Group ( AAL )

climbed 3.4% after both companies raised their revenue

guidance for the current quarter.

Norwegian Cruise Line Holdings ( NCLH ) rose 3% and Expedia

Group ( EXPE ) gained 5%.

FED POLICYMAKERS WEIGH INFLATION CONCERNS

Concerns of prolonged supply disruptions due to the closure

of the Strait of Hormuz shipping route have kept crude prices

near $100 a barrel. Worries about high oil prices will be in

sharp focus as Fed policymakers weigh inflation concerns against

signs of a weakening jobs market.

The central bank started its two-day monetary policy meeting

on Tuesday and traders expect the Fed to keep borrowing costs

unchanged in its decision on Wednesday. Rate futures suggest

expectations of one 25-basis-point cut toward the end of the

year, according to LSEG-compiled data, down from around two

before the war.

"The place where we could get in trouble with this is if the

Fed views the oil shock as inflationary and decides to respond

with more hawkish monetary policy," said Ross Mayfield, an

investment strategist at Baird Private Wealth Management.

"The best-case scenario would be some confirmation tomorrow

that the Fed is monitoring the situation, but kind of adheres to

what they've done in the past, which is try to look through big

oil shocks."

Worries about pricey AI-related stocks, along with

uncertainty about the Middle East conflict, have dropped the S&P

500 almost 4% from its record high close on January 27.

The index is trading at about 21 times expected earnings,

down from over 23 in November, but still above its average

forward price-earnings ratio of 19 over the past five years,

according to LSEG data.

The Reserve Bank of Australia hiked interest rates for a second

straight month, warning of a material risk to inflation due to

the Middle East war.

Ride-hailing app Uber ( UBER ) added almost 6% after announcing

plans to roll out robotaxis in 28 cities starting next year,

powered by Nvidia's autonomous driving software.

The S&P 500 financials sector index gained 0.7%,

rebounding from sharp losses in the week before, when worries

about private credit quality rattled investors.

Asset managers Blackstone, Apollo Global and

KKR gained over 3%.

The S&P 500 was up 0.43% at 6,727.91 points.

The Nasdaq gained 0.58% to 22,502.83 points, while the Dow

Jones Industrial Average was up 0.29% at 47,082.69 points.

Nine of the 11 S&P 500 sector indexes rose, led by energy

, up 1.43%, followed by a 0.92% gain in consumer

discretionary.

Energy companies Occidental and ConocoPhillips ( COP )

rose more than 1% each, tracking higher crude prices.

Honeywell International ( HON ) dipped 1.4% after the

industrial company said the Middle East conflict could affect

its first-quarter revenue.

The conflict has also delayed a planned summit between the U.S.

and China on President Donald Trump's request.

Eli Lilly ( LLY ) lost almost 6% after brokerage HSBC

downgraded the drugmaker to "reduce" from "hold."

Advancing issues outnumbered falling ones within the S&P 500

by a 2.9-to-one ratio.

The S&P 500 posted 20 new highs and two new lows; the Nasdaq

recorded 44 new highs and 114 new lows.