Stocks rose Wednesday after the Federal Reserve offered few clues on when it plans to raise interest rates for the first time in nearly a decade.
The Dow Jones Industrial Average advanced 121.12 points, or 0.7%, to 17751.39. The S&P 500 rose 15.32 points, or 0.7%, to 2108.57, and the Nasdaq Composite gained 22.53 points, or 0.4%, to 5111.73.
Gains were broad-based, with all S&P sectors ending higher.
The Fed decided to leave its benchmark interest rate near zero at the conclusion of its policy meeting, as expected. The central bank cited progress in the U.S. labor market, a sign it remains on course to raise rates at some point this year, but it also flagged a nagging concern about low inflation, which could give some officials pause.
Stocks have rallied since the financial crisis, driven in part by the Fed’s easy money policy. Many investors say returns on stocks will remain more appealing than returns on other assets, such as bonds, if interest rates stay lower for longer. The odds of a rate increase later this year, as reflected in the Fed fund futures market, were little changed.
“There was nothing in there where the Fed clarified that it would be raising rates in September,” said David Donabedian, chief investment officer of Atlantic Trust Private Wealth Management, which oversees about $ 27 billion.
That gave stocks some relief on Wednesday. But Mr. Donabedian said the exact timing of the first increase in rates shouldn’t be as important in the longer run. “If an impending issue has ever had time to be priced into the market, this is it,” he said.
While uncertainty around the timing of the first rate increase could prompt stock swings, many investors say the market should be able to withstand the first few moves as the overall level of rates is expected to remain low.
“Is going from zero to a quarter percentage point going to kill the economy?” said Keith Bliss, senior vice president at brokerage Cuttone & Co. “ If it does, we’ve got bigger issues,” he added.
The Fed sounded a positive note on the U.S. economy Wednesday, such as using the word “solid” to describe gains in the labor market, said Jim Paulsen, chief investment strategist at Wells Capital Management.
That will increase the emphasis on the July jobs report, which will be released next week, he said. A strong report could increase expectations for a rate increase in September, he added.
“We may pretty much know by a week from Friday what’s going to happen, and there could be lots of fireworks long before the Fed starts tightening,” he said, adding that while he wouldn’t do anything “drastic” to portfolios, moving some money along to the margins wouldn’t hurt.
On the other side of the Atlantic, the Stoxx Europe 600 closed up 1%, building on Tuesday’s 1.1% gain. The gains followed a rebound in Chinese shares after a three-day slump that knocked 11% off the value of China’s main stock index.
A handful of corporate reports also attracted attention.
Gilead Sciences Inc. GILD 2.33 % said Tuesday afternoon its two key hepatitis C drugs generated about $ 4.9 billion in sales in the second quarter, topping Wall Street estimates. The company again raised its guidance for net product sales for the year. Shares rose 2.3%.
Also after the bell Tuesday, Citrix Systems Inc. CTXS 8.10 % reported better-than-expected earnings in its most recent quarter and raised its outlook for the year. The company said its chief executive planned to retire. Shares rose 8.1%.
Meanwhile, Twitter Inc. TWTR -14.50 % said late Tuesday its second-quarter revenue rose 61%, outpacing expectations. Still, the company remains unprofitable and showed almost no growth in its core users. Shares dropped 15%.
In commodity markets, crude-oil futures rose 1.7% to $ 48.79 a barrel. Gold futures slipped 0.3% to $ 1092.70 an ounce.
Treasury prices fell, pushing the yield on the 10-year note up to 2.279% from 2.252% on Tuesday.
—Corrie Driebusch contributed to this article.
Write to Saumya Vaishampayan at firstname.lastname@example.org