Stocks rose Wednesday afternoon, after the Federal Reserve said it would keep its benchmark interest rate unchanged after a two-day policy meeting. A modest rebound in Chinese stocks also helped push the market higher.

At the close on Wall Street, the Dow Jones industrial average was up 121.1 points, about 0.7 percent, at 17,751.4. The Standard & Poor's 500 index rose 15.3 points, about 0.7 percent, to 2,108.6, and the Nasdaq composite added 22.6, about 0.4 percent, to 5,111.7.

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ENERGY: As the markets closed, the price of benchmark U.S. crude was up 82 cents at $48.80 a barrel on the New York Mercantile Exchange.

FED MEETING: As expected, the Federal Reserve's policymakers voted to keep interest rates unchanged at their near-zero levels. In a statement, the Fed said the U.S. economy continues to improve in numerous aspects, setting the stage to possibly raise interest rates later this year. Most investors expect the Fed will raise rates in September or December.

"Yeah, the economy is improving, but they are not really saying that the economy is taking off here," said analyst Tom di Galoma, head of rates trading at ED&F Man Capital. "If the Fed doesn't raise rates in September, I think we're looking at some time mid next year."

The bond market seemed to agree with the idea that the Fed was in no rush to raise rates. The benchmark 10-year Treasury note traded at a yield of 2.27 compared with the nearly 2.30 percent before the Fed statement.

CHINA MARKETS: China's Shanghai composite index rebounded 3.4 percent to close at 3,789.17. Analysts seemed to think that China's stocks have stabilized following Monday's 8.5 percent dive.