Wall Street's main indexes maintained their gains Wednesday after the Federal Reserve said it would leave the policy rate in its current 4.25%-4.50% range.
At 2:19 p.m. EST, the Dow Jones Industrial Average rose 17.04 points, or 0.28%, the S&P 500 gained 17/04 points, or 0.28%, and the Nasdaq Composite gained 74.81 points, or 0.38%.
Investors will closely monitor Fed Chair Jerome Powell's comments to gauge how he plans to combat the risk of rising prices, which remains a dominant concern for the central bank. The Fed is expected to leave rates unchanged at its meeting, scheduled later in the day.
"We're still at the beginning stages of feeling that real income shock from higher tariffs in the United States, and the uncertainty effect builds up over time," said Simon Dangoor, head of fixed income macro strategies at Goldman Sachs Asset Management.
"So I think the next couple of months of data is going to be really key about where we go from here."
Ahead of the monetary policy decision, money market moves show traders are pricing in about 46 basis points of rate cuts by the end of 2025, with a 55% chance of a 25-bps rate cut in September, according to CME Group's FedWatch tool.
Following strong monthly equity trading in May, the benchmark S&P 500 index and the Nasdaq were close to record peaks before the ongoing conflict in the Middle East made investors risk averse.
The S&P 500 index stood 2.5% below its record level, and the tech-heavy Nasdaq remained 3.3% lower.
Investors have been anxious over the possibility of a more direct U.S. military involvement in the Israel-Iran aerial war.
A source familiar with internal discussions said U.S. President Donald Trump and his team were considering a number of options, which included joining Israel in strikes against Iranian nuclear sites.
In morning trading at 9:53 a.m. EST, 10 of the 11 major S&P 500 sub-sectors rose. Energy and consumer discretionary stocks gained 0.6% each, while healthcare stocks declined 0.4%. Tesla gained 1.8%.
Shares of networking and custom AI chipmaker Marvell Technology hit a three-month high and were last up 8.7%.
Shares of stablecoin issuer Circle Internet rose 6.2% after the U.S. Senate passed a bill to create a regulatory framework for dollar-pegged cryptocurrency tokens known as stablecoins.
Scholar Rock rose 17.4% after the drugmaker said its experimental drug helped overweight patients preserve lean mass in a mid-stage trial when used in combination with Eli Lilly's weight-loss treatment.
Steelmaker Nucor rose 4.9% following a second-quarter profit forecast that came above analysts' estimates.
Initial jobless claims data on Wednesday showed the number of Americans filing new applications for unemployment benefits fell last week, but stayed at levels consistent with a further loss of labor market momentum in June.
Advancing issues outnumbered decliners by a 1.63-to-1 ratio on the NYSE and by a 1.3-to-1 ratio on the Nasdaq.
The S&P 500 posted four new 52-week highs and six new lows, while the Nasdaq Composite recorded 31 new highs and 53 new lows.