Fed holds rates at 3.75% to 4% in a split vote as stocks close higher

The Federal Reserve left its benchmark interest rate unchanged on Wednesday, Oct. 28, keeping the federal funds target range at 3.75% to 4%. The decision came a month after the Fed raised rates by a quarter point in September, its first hike since 2023, CNBC reported.

A split decision

The vote was 10-2. Fed Governor Lisa Cook and Cleveland Fed President Beth Hammack dissented in favor of another quarter-point increase, according to MarketWatch.

"Inflation remains elevated," the Fed said in its post-meeting statement. "The accumulation of more information will help the Committee determine the policy stance appropriate to ensure a timely return of inflation to the Committee's 2 percent goal."

At his press conference, Fed Chair Kevin Warsh said he would not prejudge the December rate decision, MarketWatch reported. Traders had priced in a nearly 93% chance of a hold before the meeting, according to CME's FedWatch tool.

How stocks closed

The Dow Jones Industrial Average rose 97.53 points, or 0.19%, to 52,475.10. The S&P 500 gained 21.38 points, or 0.28%, to 7,743.98, and the Nasdaq Composite added 72.04 points, or 0.27%, to 26,549.85. It was the third straight winning day for all three indexes, CNBC reported.

The Cboe Volatility Index fell 4.22% to 16.78, Anadolu Agency reported.

Bond yields

The 10-year Treasury yield rose 0.052 percentage point to 5.044%, its biggest gain since Sept. 28, while the two-year yield slipped to 4.731%, according to MarketWatch. The two-year yield fell during Warsh's press conference.

After the bell, investors turned to results from Microsoft and Alphabet, with Amazon due to report on Thursday.