(Updates with closing stock moves)

* Fed expected to keep rates unchanged

* Financials rebound from prior losses

* Delta and American raise revenue guidance

* S&P 500 +0.25%, Nasdaq +0.47%, Dow +0.10%

By Noel Randewich and Johann M Cherian

March 17 (Reuters) - Wall Street ended higher 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.

Shares of airlines and travel companies rebounded from

losses in recent weeks related to the U.S. and Israeli attack on

Iran and surging energy prices.

Delta rallied more than 6% and American Airlines Group ( AAL )

gained 3.5% after both companies raised their revenue

guidance for the current quarter. United Airlines rose 3.2%.

Norwegian Cruise Line Holdings ( NCLH ) climbed over 2% and

Expedia Group ( EXPE ) jumped more than 4%.

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 about 4% from its record high close on January 27.

The benchmark 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 ) rallied 4.2% 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 rebounded 0.5%

from sharp losses in the week before, when worries about private

credit quality rattled investors. Asset manager Blackstone

rose 4.6%, Apollo Global gained 5.3% and KKR

rose 3.3%.

The S&P 500 climbed 0.25% to end the session at 6,716.09

points.

The Nasdaq gained 0.47% to 22,479.53 points, while the Dow

Jones Industrial Average rose 0.10% to 46,993.26 points.

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

, up 1.02%, followed by a 1% gain in consumer

discretionary.

Volume on U.S. exchanges was light, with 16.9 billion shares

traded, compared to an average of 19.8 billion shares over the

previous 20 sessions.

Energy companies Occidental and ConocoPhillips ( COP )

rose about 1% each, tracking higher crude prices.

Honeywell International ( HON ) dipped 1.3% 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 ) fell nearly 6% after brokerage HSBC

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

Advancing issues outnumbered falling ones within the S&P 500

by a 1.7-to-one ratio.

The S&P 500 posted 21 new highs and two new lows; the Nasdaq

recorded 51 new highs and 137 new lows.