US stocks close with strong gains after Fed announcement

US stocks ended sharply higher Wednesday after a much-anticipated Federal Reserve meeting in which the central bank said it may start tapering soon but did not indicate its timing.

The Dow Jones Industrial Average rose 338 points, or 1%, to close at 34,258, while the S&P 500 added 41 points, or 0.95%, to 4,395.

The Nasdaq increased 150 points, or 1.02%, to 14,896.

The central bank said moderation in the pace of asset purchases may soon be warranted, indicating tapering would begin soon.

Fed Chair Jerome Powell later told a press conference that the bank may conclude tapering — the process of scaling back its $120 billion worth of monthly bond purchases — by the middle of 2022.

While tapering could begin in November or December, its postponement provided some relief for markets that were rattled by official tapering timing expectations this week.

Despite gains in recent days, the VIX volatility index, also known as fear index, plummeted 14.3% to 20.87.

While the yield on 10-year US Treasury notes lost 1.5% to 1.304%, the dollar index was up 0.28% to 93.47.

Precious metals were on the rise, with gold climbing to $1,768 per ounce and silver to $22.69.

Oil prices increased over 2%, with Brent crude trading at $75.94 per barrel and US benchmark West Texas Intermediate crude at $71.98.