US stocks jump 1% as Fed keeps rates low

New York - US stocks rose about 2% on Wednesday after the Federal Reserve left interest rates low, keeping in place its easy-money policy despite signs of an improving economy.

At the closing bell, the Dow Jones Industrial Average was at 18 293.63, up 0.9%.

The broad-based S&P 500 rose 1.1% to 2 163.11, while the tech-rich Nasdaq Composite Index advanced 1.4% to 5 295.18.

Although it hailed a pickup in economic activity since the sluggish first half of the year, the policy-making Federal Open Market Committee cut their 2016 growth forecast to 1.8%, down from 2.0% in June.

However, Fed Chair Janet Yellen said the US economy continues to broadly show progress. Fed officials indicated they foresee one rate hike before the end of the year.

"What's nice here is that the Fed didn't hike interest rates yet they still have confidence in the economy," said Gregori Volokhine of Meeschaert Capital Markets. "That's what is pushing the market higher."