Stock market climbs as Fed decision looms

U.S. stocks clambered higher on Wednesday, as the Federal Reserve raised interest rates for the third time since December 2015.

The Dow Jones Industrial Average

DJIA, +0.54%

 rose 112.73 points, or 0.5%, to end at 20,950.10. The SP 500 index

SPX, +0.84%

 advanced 19.81 points, or 0.8%, to finish at 2,385.26. The Nasdaq Composite Index

COMP, +0.74%

 advanced 43.23 points, or 0.7%, to 5,900.05.

The Fed increased its benchmark interest rate by 25 basis points, noting that headline inflation is “moving close” to its 2% target. The dot plot, a table of policy makers’ projections for short-term rates, showed more unity among the central bankers about their interest-rate forecast and indicated two more hikes this year.

Read: How a Fed rate hike will impact millions of Americans

“With little change to future expectations, investors interpreting the event as being rather Goldilocks, in that the trajectory of future rate hikes will likely remain gradual. In the absence of sharply accelerating inflation, market multiples can be sustained,” said Eric Wiegand, senior portfolio manager at the Private Client Reserve, U.S. Bank.

The overall tone of the Fed statement wasn’t too aggressive, putting to rest some market concerns of a more hawkish central bank, according to David Berson, chief economist at Nationwide.

Economists at BNP Paribas also noted in a report that the Fed’s commentary was slightly more dovish on inflation and hinted that it would be tolerant of “some inflation overshooting.”

Data released Wednesday showed the Consumer Price Index rose 0.1% in February, the smallest increase since last summer. Separately, retail sales rose 0.1% in February.

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The ICE Dollar Index

DXY, -1.17%

 fell 1.2% following the Fed’s announcement.

Stock movers: MSCI Inc.

MSCI, +3.09%

 rose 3.1% after it denied reports that it received, and rejected, a buyout bid by SP Global Inc.

SPGI, -1.38%

deeming it too low.

Southwestern Energy Co.

SWN, +5.83%

 climbed 5.8% after Citigroup upgraded the company to buy from neutral.

Twitter Inc.

TWTR, -1.89%

 dropped 1.9% after at least dozens of prominent accounts were hacked early Wednesday. The hacker posted messages supporting Turkish President Recep Tayyip Erdogan in his diplomatic feud with the Netherlands and Germany.

ATT Inc.

T, +1.19%

 rose 1.2% after the European Commission approved the telecom company’s $85 billion acquisition of Time Warner Inc.

TWX, +0.39%

Shares of Time Warner were 0.4% higher.

Shares of Golden Ocean Group Ltd.

GOGL, +10.26%

 rallied 10% after the shipping company said it had successfully completed its $60 million share offering.

Other markets: Oil prices

CLJ7, +2.60%

LCOK7, +2.28%

 rebounded after settling at their lowest levels since late November on Tuesday following data that showed major oil producer Saudi Arabia has started to increase production. Crude gained 1.5%, boosting energy shares.

Stocks in Asia closed lower as investors there waited for the Fed news. European stocks

SXXP, +0.44%

 closed higher.

The Netherlands were in focus amid a closely watched election, where populist, far-right candidate Geert Wilders is vying to win the most seats in parliament. Wilders, like Marine Le Pen in France, has expressed an interest in the Netherlands leaving the European Union, something that caused widespread volatility when the United Kingdom voted to do so in June. The iShares MSCI Netherlands ETF

EWN, +1.06%

 rose 1.1%.

–Sara Sjolin contributed to this article.

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