US stocks have closed higher as investors welcomed hints from the US Federal Reserve that a recent lift in inflation will not push rate rises forward.
At the closing bell, the Dow Jones Industrial Average jumped 98.13 points, or 0.58%, to 16,906.62, within 50 points of its record closing high.
The broad-based S&P 500 added 15 points, or 0.77%, to 1,956.99, a new closing peak. The finishing level for the index was just above the 1951.27 record reached on June 9.
Meanwhile, the tech-heavy Nasdaq Composite Index gained 25.60 points, or 0.59%, to 4,362.84.
Stocks were trading slightly lower for much of the day before the Fed announcement at 4am (AEST) pushed stocks sharply higher.
As expected, the Fed again tapered the rate of its monthly asset purchases by $US10 billion while leaving rates on hold at record lows.
Investors were worried that signs of increased consumer prices and an improving labour market would drive the Fed to a more bullish tone, with perhaps an indication the timeline for rate hikes could be pushed forward.
However, the Fed's rhetoric was scarcely altered from its last meeting statement, with no sign yet that rates will move anytime before the middle of 2015.
The central bank also announced it had revised its forecast for US growth lower, while also cutting its unemployment rate projections.