Stocks continued to rise on strong earnings and economic news as the S&P was on pace to double from its lowest level during the financial crisis.
The Dow Jones Industrial Average rose more than 50 points a day after the blue-chip index paused for breath.
Among Dow components, JPMorgan , Hewlett-Packard and Boeing rose, while Verizon and Wal-Mart fell.
The S&P 500 gained, rising to more than 1,333.58, double its level from its March 6, 2009 intraday low. The Nasdaq also gained. The CBOE Volatility Index, widely considered the best gauge of fear in the market, rose above 16.
Most key S&P sectors gained, led by energy, materials and technology, while telecom fell.
Some Federal Reserve officials believed the strenghtening economy warranted putting the brakes on the Fed's $600 billion economic stimulus program, but they concluded the economy remained weak enough to continue.
The Fed also revealed their latest economic forecasts, lowering their outlook for core inflation to 1.25 percent for 2012, noted John Canally, economist at LPL Financial.
"By lowering the core inflation forecast, it tells you they are in no hurry to raise rates," Canally said.
The fact inflation is projected to remain subdued isn't a surprise, despite the focus lately on rising food and energy costs and their eventual effects on the U.S. economy, he added. Food and energy costs actually make up a small percentage of the costs consumers pay, while prices of other elements of the CPI, such as furnishings, are falling.
"There a disconnect between actual inflation and perceptions of inflation that has to be resolved," Canally added. "All the measures I look at, both observed and forecast, are low and stable."
Oil, meanwhile, gained after news from Israel's foreign minister that Iran plans to move two warships through the Suez Canalto Syria, although prices eased off highs of the day. Brent crude rose to nearly $104 a barrel, while U.S. light sweet crude rose more than $85 a barrel.
The dollar, however, fell against the euro and a basket of currencies. The price of gold rose above $1,374 an ounce.(Read more: Dollar Zigs Instead of Zags.)
"The dollar is being sold off against the Swiss franc and the euro because, should there be a conflict with Israel, this would be bad for the U.S. as well," Brian Dolan, chief currency strategist at Forex.com told CNBC.
Despite the downdraft in the market at mid-day, stocks held their ground and slowly rose, although the major indices remained off their highs. Paul Brigandi, vice president at trading at Direxion Funds, says the market is slowly trending upwards, buoyed by steadily improving economic news and a strong batch of earnings in the fourth quarter.
Even on down days, like Tuesday, there's little follow through, Brigandi said.
"That tells you there’s underlying support in the market, that buyers are coming in at any little signs of weakness," he said.
Nearly 90 percent of all energy stocks rose on Wednesday, led by Denbury Resources , Halliburton and FMC Technologies .
Meanwhile, Air Products & Chemicals led materials stocks higher after news it would no longer pursue Airgas. That's because a judge upheld Airgas's use of a poison pill defense against Air Product's $5.9 billion hostile bid for the company. Also higher were metals and mining companies, including US Steel , AK Steel and Titanium Metals .