NEW YORK Wall Street gained on Wednesday after the U.S. Federal Reserve held interest rates steady as widely expected and signalled fewer rate hikes for the year.
The Fed indicated that moderate U.S. economic growth and "strong job gains" would allow it to tighten policy this year with fresh projections showing policymakers expected two quarter-point hikes by the year's end, half the number seen in December.
"The market has been pricing two hikes at the most and their adjustment of the end of year forecast is consistent with two hikes," said Randy Frederick, managing director of trading and derivatives for Charles Schwab in Austin. "So yes, the market is basically saying, 'We had it right.'"
The U.S. central bank did note that the United States continues to face risks from an uncertain global economy.
Nine of 10 S&P sectors were positive after the Fed's statement, with materials the best performing group and healthcare lagging the most.
"The Fed struck a very dovish tone, marking down its projected rate increase trajectory, while noting overall resilience in the U.S. economy and the absence of inflation pressures," said Brian Dolan, head market strategist at DriveWealth LLC in New Jersey. "This should be encouraging for risk sentiment and risk assets."
The Dow Jones industrial average .DJI was up 101.83 points, or 0.59 percent, at 17,353.36, the S&P 500 .SPX gained 11.99 points, or 0.59 percent, at 2,027.92 and the Nasdaq Composite .IXIC added 32.92 points, or 0.7 percent, at 4,761.58.
(Reporting by Lewis Krauskopf in New York, additional reporting by Gertrude Chavez-Dreyfuss and Saqib Iqbal Ahmed; Editing by Don Sebastian and Nick Zieminski)
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Updated Date: Mar 17, 2016 00:45 AM