Stocks inched higher on Wednesday as crude oil rebounded from a two-day selloff. 

The S&P 500 rose 0.12%, the Dow Jones Industrial Average was up 0.11%, and the Nasdaq gained 0.26%.

Crude oil extended gains after the Energy Information Administration reported a 1.3-million-barrel increase in inventories over the past week, far below estimates of 2.7 million barrels. 

Oil was already higher on hopes members of the Organization of Petroleum Exporting Countries can agree upon a production freeze at an April meeting. Members will meet in Qatar on April 17 without Iran in attendance. Iran had previously said it wouldn't commit to a freeze as it works to ramp up production to pre-sanction levels.

West Texas Intermediate crude oil jumped 3.7% to $37.70 a barrel on Wednesday morning after closing at its lowest level since March 4 a day earlier.

Industrial activity in the U.S. contracted at a faster-than-expected pace in February as utility and mining output slumped. Industrial output fell 0.5% last month compared to an expected 0.3% decline. However, manufacturing activity did show a second month of improvement.

"With energy prices beginning to drift higher, the recession in the mining sector may be nearing an end," said Millan Mulraine, deputy chief U.S. macro strategist at TD Securities. "All things considered, the overall outlook for the US industrial sector is beginning to look a little better."

Consumer inflation remained under pressure as energy weighed on the headline number. Consumer prices dropped 0.2% in February, its third month in decline. Excluding food and energy, core consumer prices rose 0.3%.

"With oil and gasoline prices turning around through the first half of March... the drag from energy will be difficult to duplicate next month," Wells Fargo analysts wrote in a note. "In addition, food prices are also beginning to offer a lift to headline inflation."

The housing market continued to show strength with new construction on single-family homes reaching the highest level since November 2007. Housing starts jumped 5.2% to a rate of 1.18 million in February, while permits rose 3.1 to a rate of 1.7 million.

Investors are waiting for an afternoon announcement from the Federal Reserve that is expected to offer clues on the pace of interest rate hikes. The Fed boosted rates by 25 basis points in December, the first increase since rates were cut to nearly zero during the 2008 financial crisis.

Fed members had once forecast as many as four rate hikes this year but that looks less likely after a string of disappointing manufacturing data in the first quarter. Fed funds futures are currently pricing in a 40% chance of two rate hikes by the end of 2016.

London Stock Exchange Group (LNSTY) and Deutsche Boerse (DBOEY) finalized an all-share merger agreement which will create Europe's largest securities operator. The new company will be named UK TopCo and will be 54.4% owned by shareholders of the German partner. Deutsche Boerse CEO Carsten Kengeter will lead the $30 billion merged company.

SunEdison (SUNE) plummeted 8% after announcing it will delay the release of its 2015 annual report. The solar company said it is still finalizing its 10-K filing after an internal investigation found issues with its accounting processes. 

LinkedIn (LNKD) fell 6% after Morgan Stanley downgraded the stock to equal weight from overweight and lowered its price target to $125 from $190. The firm said the company will see "slowing enterprise and online talent solutions growth" and lower earnings on higher development investment.

Chipotle (CMG - Get Report) slid more than 3% on reports it will walk back some of its food-safety changes after new food poisoning cases. The burrito chain said it suffered a 26.1% drop in February sales compared to a decline of 36.4% in January. The company has seen a slight turnaround since Feb. 8 when it began to distribute coupons for free meals.

Activist investor Bill Ackman said his firm Pershing Square will take a "much more proactive role" in Valeant Pharmaceuticals (VRX) after the drugmaker took a beating on slashed guidance. Valeant slumped 51% on Tuesday, its worst one-day performance on record. Pershing is Valeant's second-largest shareholder with a 9% stake.

Oracle (ORCL - Get Report) climbed 4% after beating analysts' earnings estimates. The tech giant earned 64 cents a share in its third quarter, 2 cents above estimates. The company also boosted its share buyback program by $10 billion.