US stocks end higher as Fed keeps interest rates unchanged

By Mucahithan Avcioglu

ISTANBUL (AA) - US stocks closed higher Wednesday on the Federal Reserve's decision to keep its policy rate in the 4.25%-4.50% range.

"The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run," the Fed said in a statement.

"Uncertainty around the economic outlook has increased," it added.

The central bank said the Fed's committee is strongly committed to supporting maximum employment and returning inflation to its 2% objective.

The Fed cut its GDP growth expectation for 2025 to 1.7% from 2.1% in December.

The bank also raised projections for the unemployment rate to 4.4% and the Personal Consumption Expenditures (PCE) inflation rate to 2.7%.

Fed chairman Jerome Powell warned that uncertainty is "unusually elevated" as the Trump administration tries to implement drastic economic change.

He said that tariffs were "clearly" responsible for a portion of the Fed's increased inflation expectations.

Following these developments, the S&P 500 jumped by 1.08% or 60.63 points to close at 5,675.29.

The Nasdaq Composite rose 1.41% or 246.67 points to 17,750.79 and the Dow Jones Industrial Average climbed 0.92% or 383.32 points to 41,964.63.

Meanwhile, the VIX Index, also known as the “fear index," dropped by 8.29% to 19.90.

The dollar index rose by 0.2% to 103.45, while the US 10-year treasury yield fell 0.84% to 4.245