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The markets climbed in volatile trading after the Fed unexpectedly said it will continue buying bonds at a pace of $85 billion per month. 

Today's Markets

As of 3:40 p.m. ET, the Dow Jones Industrial Average rose 154 points, or 0.99%, to 15684, the S&P 500 gained 21.2 points, or 1.3%, to 1726 and the Nasdaq Composite rallied 38.3 points, or 1%, to 3784.

The much-anticipated Fed decision day is finally here. 

The Federal Reserve said it will ‘await more evidence’ on the state of the economic recovery before it begins scaling back its $85-billion-per-month bond-buying program. Wall Street analysts broadly expected the central bank to begin tapering at this meeting. A set of projections provided along with the statement said most members of the Fed's policy-setting board expect to begin raising short-term interest rates in 2015.

Stocks immediately shot up on the news, while Treasury yields dropped sharply. 

Also on the economic front, the Commerce Department said housing starts rose 0.9% in August to an annual rate of 891,000 units, widely missing expectations of 917,000 units. Housing permits fell 3.8% to an annual rate of 918,000 units, missing estimates of 950,000.

In corporate news, FedEx (FDX) shares climbed after the shipping giant revealed a 6.5% rise in first-quarter profits. Adobe (ADBE) also jumped after it reported strong subscriber growth. 

U.S. crude oil prices advanced 50 cents, or 0.47%, to $105.92 a barrel. Wholesale New York Harbor gasoline rose 0.15% to $2.665 a gallon. Gold fell $9.50, or 0.73%, to $1,300 a troy ounce. 

Foreign Markets

The Euro Stoxx 50 rose 0.64% to 2909, the English FTSE 100 gained 0.14% to 6579 and the German DAX advanced 0.49% to 8639. 

In Asia, the Japanese Nikkei 225 rallied 1.4% to 14505 and the Chinese Hang Seng fell 0.27% to 23117.

 

Follow Adam Samson on Twitter @adamsamson.