Stocks clambered higher Wednesday for their biggest gain in two weeks and easily absorbed the Federal Reserve’s latest increase in interest rates, a move that was widely expected.
What was perhaps unexpected was the big drop in bond yields and the dollar’s value against other currencies following the Fed’s announcement. The central bank stressed that it plans to move gradually and stuck to its projection that it will raise rates a total of three times this year. That cooled speculation among some investors that the Fed could move more aggressively.
The Standard & Poor’s 500 index jumped 19.81 points, or 0.8 percent, to 2,385.26. It had been up through the day, and the gains accelerated immediately after the Fed made its announcement.
The Dow Jones industrial average rose 112.73 points, or 0.5 percent, to 20,950.10. The Nasdaq composite picked up 43.23 points, or 0.7 percent, to 5,900.05. The Russell 2000 index of small-company stocks jumped 20.45 points, or 1.5 percent, to 1,382.83. Gains were widespread, and seven stocks rose on the New York Stock Exchange for every one that fell.
The yield on the 10-year Treasury fell to 2.49 percent from 2.60 percent late Tuesday, and the 30-year yield fell to 3.11 percent from 3.18 percent. Both remain higher than they were a few weeks ago, though.