U.S. Stock ETFs Strengthen Thanks to Fed Rate Decision

U.S. equities and stock exchange traded funds increased Wednesday ahead of the Federal Reserve announcement as the markets widely anticipated the first interest rate hike for the year.

The S&P 500 Index, along with related funds including the SPDR S&P 500 ETF (NYSEArca: SPY), iShares Core S&P 500 ETF (NYSEArca: IVV) and Vanguard 500 Index (NYSEArca: VOO), were 0.4% higher Wednesday.

The Fed is scheduled to announce its latest policy statement along with its economic projections at 2 P.M. ET. Looking at the Fed fund futures, options traders have priced in more than a 90% chance of a quarter point hike.

The economy has shown improvements, with the labor market near full employment and inflation rising. Many also anticipate the Donald Trump administration may enact a number of expansionary policies, which could cause the Fed to raise rates at a quicker pace.