Stocks Close Higher as Markets Welcome Fed Decision

US stocks rose after Federal Reserve officials approved plans to speed up the withdrawal of the pandemic stimulus efforts, giving investors and traders more insight into the central bank’s response to hot inflation.

All three major indexes turned higher after the afternoon release of a much-awaited Fed statement, published at the end of a two-day policy meeting, and continued to climb as Chairman Jerome Powell spoke at a news conference. Fed officials voted to hold rates near zero Wednesday but most signaled they were ready to lift their short-term benchmark rate at least three times next year.

Stocks had pulled back this week as investors awaited the update from the central bank. Some investors said that uncertainty about the Fed’s next moves, rather than unhappiness with the potential changes in monetary policy, may have weighed on stocks in recent sessions.

The S&P 500 gained 75.76 points, or 1.6%, to 4709.85, closing less than 0.1% away from a record. Ten of the US stock benchmark’s 11 sectors rose, while the energy group declined. The Dow Jones Industrial Average rose 383.25 points, or 1.1%, to 35927.43. The Nasdaq Composite climbed 327.94 points, or 2.2%, to 15565.58.

Accommodative monetary policy has helped propel US indexes to dozens of records since the arrival of the coronavirus pandemic sent stocks swooning in early 2020. Low interest rates have made it easy for companies to borrow and pushed investors toward stocks.

But surging consumer prices have intensified the focus by Fed officials on curbing inflation, raising questions among investors about how quickly the central bank would pare back its asset purchases.