Stocks rose sharply on Wednesday after the Federal Reserve kept interest rates unchanged and said it will be "patient" with raising rates moving forward. Strong earnings from Boeing and Apple also boosted the market.
The Dow Jones Industrial Average closed 434.90 points higher at 25,014.86, as Boeing and Apple outperformed. Wednesday also marked the Dow's first close above 25,000 since Dec. 4. The gained 1.56 percent, led by the tech and consumer discretionary sectors. The Nasdaq Composite advanced 2.2 percent to 7,183.08.
"It seems like the Fed is becoming more market dependent rather than data dependent," said Jack Ablin, founding partner of Cresset Wealth. "The market has become accustomed to below fair-value interest rates and trying to raise them is creating hardship. Accommodation is the new neutral."
In a statement, the central bank said: "The Committee will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate." The statement also dropped the word "gradual."
The Fed addressed the balance sheet, which had been a concern for investors, in a separate statement. The Fed said it "is prepared to adjust any of the details for completing balance sheet normalization in light of economic and financial developments."
"This was a pretty dramatic change from what they were saying in December, even though it's not unexpected," said James Kahn, chairman of the economics department at Yeshiva University. "They basically went from saying we're going to continue raising rates into 2019 to not saying one way or the other what they're going to do."
"For a six-week time gap, that's unusual," Kahn said.
Fed Chairman Jerome Powell said in a news conference that the case for hiking rates "has weakened," noting he would "need to see a need for further rate hikes." The S&P 500 posted on Wednesday its first positive close on a Fed decision under Powell's tenure, data from Bespoke Investment Group show.
The S&P 500 is up 6.95 percent this month, which ends on Thursday. In December, the S&P 500 briefly dipped into bear-market territory on an intraday basis, trading 20 percent below an all-time high set in September. The S&P 500 has surged more than 13 percent since Dec. 24.
Boeing shares jumped 6.25 percent after its quarterly earnings easily beat expectations. The aerospace giant also posted annual revenue of more than $100 billion for the first time and gave strong earnings guidance for 2019.
Apple climbed 6.8 percent after reporting a quarterly profit that barely beat estimates. The company's overall quarterly revenue topped expectations, but iPhone sales for the quarter came in below estimates. The report comes after the company had slashed its revenue guidance earlier this month, citing a slowdown in China.
"You went into the earnings season with horrible sentiment, and the Apple numbers are maybe the best example of that," said Mike Bailey, director of research at FBB Capital Partners. "The market had blown up; Apple blew up. Now Apple had a good number, not great, and people love it. That's what's going on with the whole market. People are saying they are good enough."
"The earnings season has been like a disappointing bonus payment. You've got your job. Your boss is telling you you're getting a bonus. You get one, but it's disappointing," Bailey said. "Companies are making money, they're actually beating estimates, but it's not very good."
The results from the Dow members come during the busiest week of the earnings season. By the end of this week, more than 100 S&P 500 companies will have released their quarterly results. So far, 71 percent of the companies that have reported have surpassed earnings expectations, FactSet data show.
AMD shares also surged nearly 20 percent after releasing earnings that matched expectations. The chipmaker added it expects 2019 sales to grow in the "high single digit percentage" range.
"It's worthwhile to note that none of the bearish news events, be it a government shutdown, China, nor the FOMC, have served to derail this recent bounce," said Mark Newton, managing member at Newton Advisors, in a note to clients. "Even bearish earnings news out of Nvidia and Caterpillar couldn't take down stocks. Meanwhile good news last night out of AAPL and AMD looks to be helping these stocks."
"It always pays to note when bad news doesn't work, while good news does," he said.
On the data front, U.S. private payrolls grew by 213,000 in January, according to data released by ADP and Moody's Analytics. Economists polled by Refinitiv expected a gain of 178,000. The data come ahead of Friday's nonfarm payrolls report.
— CNBC's Sam Meredith and Spriha Srivastava contributed to this report.