US stocks rally after Federal Reserve announces no 2019 rate hikes

Traders work on the floor at the New York Stock Exchange (NYSE) in New York. (Reuters)

US stocks rallied and the dollar retreated on Wednesday after the Federal Reserve announced it expects no interest rate hikes in 2019.

The Fed announced that it was keeping its benchmark rate - which can influence everything from mortgages to credit cards to home equity lines of credit - in a range of 2.25 percent to 2.5 percent. It also said it will stop shrinking its bond portfolio in September, a step that should help hold down long-term interest rates.

The S&P 500 and Nasdaq were both in positive territory, while the Dow was narrowly negative after the Fed's announcement. Prior to the 1800 GMT press release, all three indices had been decisively negative.

Earlier in the day, US stocks fell broadly in midday trading on Wall Street ahead of the Federal Reserve’s decision.

Health care and technology companies led the market lower as investors favored safer holdings in the utilities and real estate sectors. Microsoft and Apple edged lower, dragging other technology stocks down with them.

Last Update: Wednesday, 20 May 2020 KSA 14:04 - GMT 11:04