NEW YORK (Reuters) - Stocks and the dollar rose on Wednesday after economic data indicated solid momentum, keeping alive the prospect of a U.S. interest rate increase in December.

Traders work in front of the German share price index, DAX board, at the stock exchange in Frankfurt, Germany, August 24, 2017. REUTERS/Staff/Remote

Gasoline futures surged and crude oil was down, as flooding and damage from Tropical Storm Harvey shut nearly a quarter of U.S. refinery capacity, curbing demand for crude while raising the risk of fuel shortages.

Gross domestic product data on Wednesday showed the U.S. economy grew faster than initially thought in the second quarter, while a separate report showed U.S. private-sector employers added 237,000 jobs in August, the biggest monthly increase in five months.

MSCI's world index .MIWD00000PUS, which tracks shares in 46 countries, was up 0.13 percent, taking strength from a rally on Wall Street.

“I have doubts how sustainable the macro economy is, but perceived fundamentals are still OK. GDP confirmed that,” said John Velis, macro strategist at State Street Global Markets in Boston.

President Donald Trump said he wants to see the U.S. corporate tax rate to drop to 15 percent, but the White House offered no detailed plan, leaving the proposal in the hands of Congress.

Tax reform was one of Trump’s main talking points during his campaign and expectations for its passage have been a main driver of stock gains since he won the presidency.

The Dow Jones Industrial Average .DJI rose 27.06 points, or 0.12 percent, to close at 21,892.43, the S&P 500 .SPX gained 11.29 points, or 0.46 percent, to finish at 2,457.59 and the Nasdaq Composite .IXIC added 66.42 points, or 1.05 percent, to end at 6,368.31.

European stocks rose in a relief rally a day after geopolitical concerns caused a sharp dip across equity markets. The pan-European STOXX 600 .STOXX closed 0.7 percent higher.

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The U.S. dollar rose broadly on speculation the European Central Bank could step in to weaken the euro and after the strong data boosted expectations for a solid U.S. jobs report on Friday.

The euro was down 0.73 percent, on track for its biggest daily percentage drop against the dollar in nearly four weeks.

Analysts said traders were starting to suspect that ECB President Mario Draghi could be growing more concerned about the euro’s rise, despite making no mention of the currency’s strength at a central bank gathering in Jackson Hole, Wyoming last Friday.

“We’ve come a long way rather quickly,” said Dean Popplewell, chief currency strategist at Oanda in Toronto, in reference to the euro’s gains this year. He said European economic data had not justified the euro’s appreciation.

The ECB is set to hold a policy meeting next week.

U.S. Treasury yields held near nine-month lows as concerns about rising tensions with North Korea offset the robust data.

The 10-year notes US10YT=RR were last down 3/32 in price to yield 2.145 percent, up from 2.136 percent on Tuesday.

With Tropical Storm Harvey shutting over a fifth of U.S. refining capacity, U.S. gasoline futures RBc1 were up 6.8 percent at $1.9045 a gallon, having hit $1.9231, the highest since July 2015.

Brent oil LCOc1, the international benchmark for crude trading, settled down $1.14, or 2.19 percent, at $50.86 a barrel. U.S. crude CLc1 settled down 48 cents, or 1.03 percent, at $45.96.

Gold steadied as a stronger dollar pushed the metal off Tuesday’s 9-1/2-month high, but the precious metal remained above $1,300 on renewed tensions between Washington and North Korea.