Federal Reserve's Rate Pause Spurs Stock Market Rally

The S&P 500 and Nasdaq saw gains on Wednesday after the Federal Reserve kept U.S. interest rates unchanged. The Fed signaled potential rate easing in September, seven weeks ahead of the U.S. elections. All 11 sectors of the S&P 500 advanced, most notably technology and consumer discretionary stocks.

The S&P 500 and Nasdaq registered early gains on Wednesday following the Federal Reserve's decision to maintain U.S. interest rates. The central bank hinted at possible monetary policy easing in September as inflation continues to cool.

All 11 sectors of the S&P 500 showed positive movement, led by technology and consumer discretionary stocks. The Nasdaq Composite and the blue-chip Dow also experienced upticks. The Fed maintained its benchmark overnight interest rate in the 5.25%-5.50% range during its two-day policy meeting but left the door open for easing in September, just weeks before the November U.S. elections.

The Dow Jones Industrial Average climbed 0.73% to 41,042.37, the S&P 500 increased by 1.64% to 5,525.37, and the Nasdaq Composite rose by 2.45% to 17,567.41. "It was the worst kept secret that the Fed wouldn't cut rates in July," stated Jake Dollarhide, CEO of Longbow Asset Management. "The Fed will likely implement a rate cut in September, but this may already be factored into stock prices."

(With inputs from agencies.)