US stocks closed higher on Wednesday after the Federal Reserve left interest rates unchanged, in line with investor expectations. Fed Chairman Jerome Powell also said there was still “a lot of uncertainty” about the economy over President Donald Trump’s tariff policy.
The Dow Jones Industrial Average rose 285 points, or 0.7%. The Standard & Poor’s 500 Index rose 0.43%, and the Nasdaq Composite Index gained 0.27% in the late afternoon after being in the red all day.
Investors had been speculating that the Federal Reserve would not raise interest rates. “We think the most sensible course of action right now is to watch the situation,” Fed Chairman Powell said.
The yield on the 10-year Treasury bond edged down to 4.28%. The dollar strengthened slightly against other major currencies.
“The tariff landscape is still evolving and the depth of the impact is not yet fully understood,” said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management Group. “The next economic data will influence the Fed’s next decision.”
According to the CME FedWatch tool, the probability that the Federal Reserve will keep interest rates unchanged in June is 76.8 percent, up from 69 percent yesterday and 33 percent a week ago.
“The biggest challenge right now is that the tariff landscape is changing rapidly, which is causing the economic outlook to change frequently,” said Bill Adams, chief economist at Comerica Bank.
According to CNN’s Fear and Greed Index, “Greed” sentiment led the market for the third consecutive day. The index was somewhere between “extreme fear” and “fear” until late February, but it has now moved into “greed” territory.
Analysts believe that any decision and information regarding “interest rates federal reserve” at this time could have a major impact on the US economy and stock market.
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