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The central bank's Federal Open Market Committee had been widely expected to leave the central bank’s overnight lending rate unchanged.
Traders had also been betting policymakers would lay the groundwork for a rate cut in July, according to the CME’s FedWatch Tool.
The federal funds rate is currently in a range of 2.25 percent to 2.50 percent:
The upshot of the central bank's decision to leave the federal funds rate unchanged sent a clear signal to investors about its "dovish" disposition.
"We’re definitely hearing a decidedly more dovish Fed and while you could point the finger at pressure from the White House, it’s key to remember that the Fed’s focus has always been on two things and two things only: Jobs and inflation," Mike Loewengart, vice president with E*TRADE Financial Corporation.
"Jobs is strong so no worries on that front, but inflation has been consistently below the Fed’s target, which would suggest they need to act to get it back to where it needs to be. And amid softening economic data, all other influences could be considered noise until the Fed feels the economy is in the right place, with inflation as their guide."
The yield on the 10-year Treasury slipped to 2.03 percent.
|I:DJI||DOW JONES AVERAGES||27109.64||-110.21||-0.40%|
|I:COMP||NASDAQ COMPOSITE INDEX||8161.240524||-23.97||-0.29%|
Crude oil prices rose 0.76 percent to $54.31 per barrel.
Meanwhile, U.S. Trade Representative Robert Lighthizer said on Wednesday he expects he and the U.S. Treasury secretary will meet the Chinese vice premier ahead of the G20 summit in Japan later this month. Lighthizer made the comment at a hearing of the House of Representatives Ways and Means Committee.
China and the United States have agreed to revive trade talks after a long lull in efforts to resolve a costly trade dispute.
President Trump helped give equities an extra boost on Tuesday, confirming he will meet with Chinese President Xi at the G-20 meeting in Japan via a Tweet. Investors viewed the development as a positive sign for progress on trade talks.
|UNH||UNITEDHEALTH GROUP INCORPORATED||260.90||-5.75||-2.15%|
The health care sector gained ground as shares of UnitedHealth Group, Pfizer and Allergan rose.
In Asian markets on Wednesday, China's Shanghai Composite Index gained 1 percent, Hong Kong's Hang Seng rose 2.6 percent and Japan's Nikkei jumped 1.7 percent.
European markets ended the day mostly lower. London's FTSE slipped 0.5 percent, Germany's DAX was off 0.2 percent and France's CAC added 0.2 percent.