Business

US stocks rise on Fed decision to hold interest rates

NYSE traders Image copyright Getty Images

(Close): US markets rose on Wednesday, following the decision by the Federal Reserve to keep interest rates unchanged and a statement indicating the rate would only rise twice in 2016.

The Dow Jones industrial average climbed 79.64 points to 17,331.17.

The S&P 500 gained 11.68 points to 2,027.61, while the tech-focused Nasdaq index was up 35.30 at 4,763.97.

Analysts had expected the US central banks to keep its benchmark interest rate between 0.25% and 0.5%.

"Proceeding cautiously will allow us to verify that the labour market is continue to strength given the economic risk from abroad," said the Chairman of the Federal Reserve, Janet Yellen.

The decision led the value of the dollar to fall 0.79% against the pound and 1.04% against the euro.

Caterpillar- the maker of construction equipment- was one of the day's biggest winners, rising 2.6%.

Tech companies had a strong day. Microsoft shares climbed 1.4% and Apple rose 1.3%.

Before the markets opened, new inflation figures from the Commerce Department showed that the consumer price index (CPI) fell 0.2% in February, led by a sharp fall in energy prices.

But core CPI, which strips out food and energy, rose 0.3%.