U.S. equities closed mostly higher on Wednesday after the Federal Reserve kept interest rates unchanged, as was widely expected.
The Dow Jones industrial average gained about 25 points, having risen more than 100 points earlier in the session, with Apple contributing the most gains. The S&P 500 rose less than 0.1 percent, with utilities falling 1.7 percent to lead decliners and health care outperforming. The Nasdaq composite rose 0.5 percent as Apple spiked around 6 percent.
The Federal Open Market Committee — the central bank's policy-making arm — kept its benchmark overnight lending rate target at 0.5 percent to 0.75 percent. Ahead of the announcement, market expectations for a rate hike were just 4 percent, according to the CME Group's FedWatch tool.
"That was the expectation and they delivered," said Jason Thomas, chief economist at AssetMark. "One thing we're sure is that the Fed is going to telegraph its next move." "With all the talk about growth, ... the Fed will have even more pressure to do so," he said.
There was little in the post-meeting communique to indicate when the Fed might resume the rate normalization process. However, officials did take note of a change in mood. "Measures of consumer and business sentiment have improved of late," the committee said in its statement. The language was new, and in the arcane process of discerning where the thinking resides among central bankers, significant.
"The market's fear was that the Fed could've been more hawkish; that didn't happen," said Matt Toms, chief investment officer of fixed income and Voya Investment Management. "The one thing that could be viewed as more hawkish — and that's grasping because it was a pretty tame statement — is that the Fed's 2 percent inflation target could be reached in the medium term."
The Fed raised rates for just the second time in a decade at its December meeting. The central bank also signaled the possibility of three rate hikes this year.
"Donald Trump's executive orders have shaken the Fed and they do not want to increase rates as aggressively as previously thought. The unanimous decision by the Fed has made it clear that March meeting may not have much life," said Naeem Aslam, chief market at Think Markets.