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* Tesla, VF Corp drag consumer discretionary sector

* Arm Holdings drop as Bernstein initiates coverage

* Micron, L3Harris Technologies gain on ratings upgrades

* PayPal slips after stock downgrade

* Indexes up: Dow 0.24%, S&P 0.28%, Nasdaq 0.20%

Sept 18 (Reuters) - Wall Street's main indexes rose on Monday in choppy trading as energy stocks tracked higher crude oil prices, while investors awaited the Federal Reserve's interest rate decision later this week.

Energy was the top S&P 500 sector gainer, up 1.1%, as crude prices firmed near the $95-per-barrel mark on tight supply.

The uptick in crude prices threatens to keep inflation elevated even as a slew of recent stronger-than-expected economic data has eased concerns about a potential recession without raising fears of a September rate hike.

Consumer discretionary was the worst hit sector, down 0.7%, as electric-car maker Tesla dropped 2.6% to an intraday one-week low, while VF Corp shed 4.2% as Piper Sandler downgraded it to "neutral" from "overweight".

Major growth names including Microsoft and Amazon.com edged 0.1% and 0.4% lower, respectively, with U.S. Treasury yields edging higher on uncertainty around interest-rate trajectory through year-end. The benchmark 10-year yield hovered around its highest level since 2007.

"Investors are pretty much just sitting on their hands right now and waiting to see what the Fed does, its updates to the dot plots and maybe some future direction for rates," said Paul Nolte, market strategist at Murphy & Sylvest Wealth Management.

"There's going to be one more hike before year-end and we're going to see rates stay up for a while because inflation is not yet close to their target."

Traders largely expect the Fed to keep rates unchanged at 5.25% to 5.5% during its meeting on Wednesday, while their odds for another pause in November stand at 66%, according to the CME FedWatch Tool.

Goldman Sachs, much like other big investors such as J.P. Morgan Asset Management and Janus Henderson Investors, anticipates the central bank to lift its economic growth projections this week. It also expects rates to have peaked.

UK-based chip designer Arm Holdings, which had a stellar debut on Thursday, dropped 5.1% after Bernstein started covering the stock with an "underperform" rating.

A slump in chipmakers on concerns over weak demand and a slide in megacap growth stocks had driven the S&P 500, the Nasdaq and the Dow to their worst single-day fall on Friday since Aug. 24, with the indexes losing between 0.8% and 1.5%.

At 11:51 a.m. ET, the Dow Jones Industrial Average was up 83.71 points, or 0.24%, at 34,701.95, the S&P 500 was up 12.37 points, or 0.28%, at 4,462.69, and the Nasdaq Composite was up 28.10 points, or 0.20%, at 13,736.43.

Chipmaker Micron Technology rose 1.3%, following Friday's rout, after Deutsche Bank upgraded its stock rating to "buy" from "hold".

L3Harris Technologies rose 1.7% after Wells Fargo upgraded the aerospace and defense firm to "overweight" from "equal-weight".

PayPal Holdings lost 1.3% after MoffettNathanson downgraded the digital payments firm to "market perform" from "outperform".

Declining issues outnumbered advancers by a 1.02-to-1 ratio on the NYSE and by a 1.46-to-1 ratio on the Nasdaq.

The S&P index recorded five new 52-week highs and 11 new lows, while the Nasdaq recorded 24 new highs and 172 new lows. (Reporting by Ankika Biswas and Shristi Achar A in Bengaluru; Editing by Savio D'Souza and Vinay Dwivedi)