U.S. stocks closed at their highest level in almost four weeks, with equities spurred on by a rally in energy shares and deal activity among beer brewers while Federal Reserve policy makers debated whether to raise interest rates.

The Standard & Poor's 500 Index rose 0.9 percent to 1,995.12 at 4 p.m. in New York, its highest since Aug. 20, after the gauge rallied 1.3 percent yesterday.

Data today showed prices paid by American households declined in August as cheaper gasoline helped keep inflation below the objective of Fed policy makers. The consumer-price index dropped 0.1 percent, the first decline since January. The so-called core measure, which strips out often-volatile fuel and food costs, rose 0.1 percent for a second month.

A 15 percent plunge in energy costs over the past 12 months and a rising dollar are acting as a brake on inflation that the Fed views as temporary. Central bankers will have to weigh restrained prices, uneasy financial markets and a resilient U.S. labor market as they consider raising rates.

Speculation has increased that the Fed will delay a rate increase as China ignited concern that its slowdown could weigh on global growth. While investors remain confident the central bank will raise borrowing costs this year, traders are pricing in a 28 percent chance of action on Thursday, down from 48 percent before China's currency devaluation last month. Odds of a move at the December meeting are about 63 percent.

The Organization for Economic Cooperation and Development said the Fed would be right to begin raising rates this week but it needs to signal its intentions to the rest of the world.

"Do it now to remove uncertainty facing emerging markets, but communicate more clearly the nature of the more gradual path, that's the message," OECD Chief Economist Catherine Mann said in an interview in Paris.

Equities have been particularly volatile recently amid concerns about China and the Fed's rate intentions. While the Chicago Board Options Exchange Volatility Index through Tuesday had slipped 45 percent from its high last month, it was still 41 percent above its annual average.

With the S&P 500 trading at 16.7 times its members' projected earnings, history shows that a Fed rate increase could be bad news for investors banking on a rebound in U.S. corporate earnings. Since World War II, profit growth has fallen by roughly half in the year after a Fed hike, data from Ned Davis Research Group show. Analysts predict S&P 500 earnings will be flat this year, before rising 9.7 percent in 2016.