The Federal Reserve kept rates unchanged on Wednesday and pointed to solid U.S. economic growth and a strengthening labour market while downplaying the impact of recent hurricanes, a sign it is on track to lift borrowing costs again in December.
MSCI's gauge of stock markets held gains in the wake of the announcement, although the index was off a high hit earlier in the session. U.S. Treasury yields were little changed after the announcement.
Next up for the central bank is the expected announcement on Thursday for a new Fed chair nominee from U.S. President Donald Trump. Market participants widely expect it to be Fed Governor Jerome Powell, who is considered more dovish on interest rates than some other candidates and thus relatively stock-market friendly.
"The pending announcement regarding the new chair seems to be overshadowing most everything," said Michael Arone, Chief Investment Strategist at State Street Global Advisors in Boston.
"The overarching uncertainty around the decision and then potentially the news of the new chairperson, equities are probably kind of hedging their bets, so to speak."
Data on Wednesday showed the U.S. economy remained on solid footing ahead of Friday's payrolls report. Although a measure of factory activity lost ground as hurricane-related supply disruptions faded, another report showed private sector hiring surged.
Shares of Japanese multinational Sony soared as much as 12.3 percent to a nine-year high after the electronics and entertainment firm forecast its best-ever annual profit. U.S. listed shares of the stock were up 0.7 percent at $43.70.
The Dow Jones Industrial Average rose 52.54 points, or 0.22 percent, to 23,429.78, the S&P 500 gained 5 points, or 0.19 percent, to 2,580.26 and the Nasdaq Composite dropped 15.08 points, or 0.22 percent, to 6,712.59.
Benchmark 10-year notes last rose 1/32 in price to yield 2.3721 percent, from 2.376 percent late on Tuesday.
After the closing bell in the United States, earnings are expected from Facebook, which was up 0.87 percent as the biggest boost to the S&P 500. On Thursday, earnings are expected from iPhone maker Apple Inc.
Of 326 companies in the S&P 500 that have reported results, 73 percent topped analyst expectations, compared with 72 percent over the past four quarters, according to Thomson Reuters data. The earnings growth estimate for the quarter is currently at 7 percent.
The pan-European FTSEurofirst 300 index rose 0.43 percent after touching its highest level since August 2015 and MSCI's gauge of stocks across the globe gained 0.32 percent.
A rise in oil prices to their highest level since mid-2015 also served to boost energy names. Oil prices retreated, however, after U.S. government data showed that the latest weekly draw in domestic crude stocks was not as big as an industry trade group had reported.
U.S. crude fell 0.22 percent to $54.26 per barrel and Brent was last at $60.41, down 0.87 percent on the day.
The S&P energy index gained 0.9 percent, on track for the best day since late September, while in Europe basic resources stocks jumped 2.7 percent.
The dollar index rose 0.26 percent, with the euro down 0.25 percent to $1.1615.
(Reporting by Chuck Mikolajczak; Editing by Chizu Nomiyama and Nick Zieminski)
By Chuck Mikolajczak