Fed-fund futures suggested a very modest pickup in expectations for a rate increase in December, after the USA central bank signaled it expects an increase by the end of the year, and three officials also dissented for the first time since 2014.
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The US central bank’s policy-setting committee left its target rate for overnight lending unchanged at the end of its two-day meeting on Wednesday.
But the central bank’s statement hints at a possible rate hike in December if the labor market continues to improve.
Traders generally had not expected the Fed to raise rates, with bets before the meeting of only an 18 percent chance of a hike, according to the CME FedWatch website. Economists have largely shrugged off the potential of a rate increase in November, as the meeting is scheduled just days ahead of the election.
The dollar index, which measures the greenback against a basket of currencies, slipped to its lowest since September 12 before paring losses.
At 9:36 am ET (1336 GMT), the Dow Jones Industrial Average was up 132.52 points, or 0.72 per cent, at 18,426.22.
Energy shares were also in demand after oil prices also rose on a weaker dollar, extending gains from the previous session when a surprise third consecutive weekly U.S. crude inventory draw tightened supply.
Adding some support to the Fed’s plans for at least one hike this year was a report that showed the number of Americans applying for unemployment last week fell to a two-month low. All 30 of the its components were higher.
S&P 500 e-minis were down 3.75 points, or 0.17 percent, with 97,617 contracts traded.
NEW YORK – World stock indexes jumped and the Nasdaq hit a record high on Thursday while bonds rallied, a day after the Federal Reserve signaled an increasingly cautious approach to future U.S. rate increases. For the year, the benchmark S&P 500 is up 5.8 percent.
Shares of Amazon.com touched a record after BMO raised its price target to $900.
JPMorgan rose 0.5 percent and was the top boost on the S&P financial index .SPSY after striking a deal with Wal-Mart to process payments.
Red Hat rose 6.7 per cent to US$82.27 after the Linux operating system distributor reported second-quarter revenue and profit that beat market expectations.
NYSE advancing issues outnumbered decliners 4.84-to-1; on Nasdaq, a 2.54-to-1 ratio favoured advancers.
US stocks mostly rose after the central bank’s press conference, sending the Nasdaq to its eighth record close this year.
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The S&P 500 index showed 26 new 52-week highs and no new lows, while the Nasdaq recorded 80 new highs and three new lows.
