The US markets ended higher on Wednesday amid a positive reaction to the Federal Reserve's widely expected decision to leave interest rates unchanged. The Fed said it decided to maintain the target range for the federal funds rate at 5.25 to 5.50 percent, marking the third time in four meetings that the central bank has refrained from raising rates. The accompanying statement suggested the Fed is still considering additional rate hikes in an effort to return inflation to its 2 percent objective, but traders seem optimistic the recent cycle of increase is over. The early strength on markets came as the release of some weaker than expected U.S. economic data eased concerns about the outlook for interest rates. Payroll processor ADP released a report before the start of trading showing private sector employment in the U.S. increased by less than expected in the month of October.
The report said private sector employment climbed by 113,000 jobs in October after rising by 89,000 jobs in September. Street had expected employment to jump by 150,000 jobs. On the sectoral front, Housing stocks moved sharply higher over the course of the session, resulting in a 3.5 percent spike by the Philadelphia Semiconductor Index. Substantial strength was also visible among semiconductor stocks, with the Philadelphia Semiconductor Index surging by 2.3 percent. The index climbed further off the five-month closing low set on Monday. Advanced Micro Devices (AMD) led the way higher after reporting better than expected third quarter earnings and providing upbeat guidance for its AI chip business.
Dow Jones Industrial Average rose 221.71 points or 0.67 percent to 33,274.58, Nasdaq surged 210.23 points or 1.64 percent to 13,061.47 and S&P 500 was up by 44.06 points or 1.05 percent to 4,237.86.
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