Wall Street closed higher on Wednesday after the Federal Reserve held its benchmark interest rate steady, leaving borrowing costs unchanged while inflation stayed above the central bank’s target. The S&P 500 rose 21.38 points, or 0.28 percent, to 7,743.98. The Dow Jones Industrial Average added 97.53 points, or 0.19 percent, to 52,475.10. The Nasdaq Composite gained 72.04 points, or 0.27 percent, to 26,549.85.
The Federal Reserve kept its benchmark rate in a range of 3.75 percent to 4.00 percent. The decision was widely expected, and it left the rate where it stood before the meeting. The Federal Reserve vote was 10 to 2, with two policymakers favoring an immediate quarter point increase. The split showed that concern about price pressure remained inside the committee even as most members chose to wait for more data.
In its statement, the Federal Reserve described the economy in stronger terms than before and said inflation “remains elevated”. The central bank gave no firm signal about its December meeting, but traders raised the chance of a quarter point rise in December to about 85 percent, from 78.3 percent on Tuesday, according to CME FedWatch data cited in market reports. Investors now await the personal consumption expenditures price index on Thursday, the Federal Reserve’s preferred inflation gauge, along with the advance estimate of third quarter gross domestic product.
Federal Reserve vote shows split on inflation
The two dissents came from policymakers who wanted borrowing costs to rise at once rather than stay on hold. Their votes pointed to worry that inflation has not cooled fast enough, even though the economy kept growing. The majority took a different view, choosing to hold rates and watch incoming reports before moving again. That patient stance has been the committee’s line through recent meetings, as officials weigh growth against price pressure.
Federal Reserve decision lifts chip stocks
Technology and semiconductor stocks gave the market much of its support. Micron Technology rose 5.9 percent after South Korean chipmaker SK Hynix reported a more than sevenfold jump in quarterly profit. SK Hynix shares listed in the United States surged 13.3 percent, and the Philadelphia Semiconductor Index gained 1.8 percent for a fourth straight daily advance. Chip demand tied to artificial intelligence spending has been one of the strongest themes in the market this year, and the SK Hynix result gave it fresh support.
Energy stocks also gained ground. Oil prices rose during the session on reports of a strike against a Saudi refinery, with Brent crude settling near 115 dollars a barrel. Higher energy prices cut both ways for investors, since they lift energy shares while adding to inflation pressure that the Federal Reserve watches closely. Real estate and utility shares retreated, as higher bond yields weighed on rate sensitive parts of the market.
Federal Reserve outlook turns to Thursday data
The Federal Reserve meets again in December, and the data due before then will shape what it does. Thursday brings the inflation gauge the central bank follows most closely and the first estimate of third quarter economic growth. Strong reports could firm up the case for a December rise that futures markets already price as likely. Softer reports could give the committee room to hold again. For now, the market read the October decision as a pause rather than an end to tightening, with the bond market doing part of the work the central bank chose not to do.
The Federal Reserve had earlier left interest rates unchanged at 3.75% to 4.00% in a 10-2 vote, with two officials favoring a rate increase. During the regular session, the S&P 500 rose 0.28% and the Nasdaq Composite added 0.27%. After the close, Nasdaq futures fell more than 1% as traders weighed the Alphabet miss against the Microsoft beat. The next Microsoft earnings report arrives in early 2027, and Alphabet will report its fourth quarter results in the same period.
Gold prices rose 0.10 percent to 4,068.14 dollars an ounce at the United States market close.