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US stocks hit record highs on Wednesday after the Federal Reserve held interest rates unchanged and stuck to its projection of three rate cuts this year.

The S&P 500 (^GSPC) rose 0.8% finishing at 5,224.61, its first ever close above 5,200. Meanwhile, the Dow Jones Industrial Average (^DJI) popped about 1% and hit a record close of 39,511. The tech-heavy Nasdaq Composite (^IXIC) led the gains, rising more than 1% to close at a record level of 16,369.

All three of the major averages had been in the red at some point during the session prior to the Fed's announcement.

Along with its policy announcement, the Fed released updated economic forecasts in its Summary of Economic Projections (SEP), including its "dot plot," which maps out policymakers' expectations for where interest rates could be headed in the future.

Fed officials see the fed funds rate falling to 4.6% by the end of 2024. That suggests the Fed will cut rates by 0.75% this year. Notably, this falls in line with market pricing from investors entering Wednesday.

Bonds were little changed on the news. Yields on the 10-year Treasury (^TNX) were slightly lower at around 4.28%, after rising over 20 basis points in the past two weeks.

In sum, the market's reaction to the Fed meeting furthered signs of broadening in the market rally, exemplified by the small cap benchmark index (^RUT) rallying 2% and six of the eleven S&P 500 sectors rallying more than 1%.

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