Australia stocks rise after U.S. Fed hikes interest rate as expected

The U.S. Federal Reserve on Wednesday increased its benchmark interest rate by half a percentage point, in line with market expectations. The central bank also outlined a program whereby it will eventually cut its bond holdings by $95 billion a month.

Fed Chair Jerome Powell emphasized the commitment to bringing inflation down, though he said a 75 basis points hike is “not something the committee is actively considering.”

Markets on Wall Street jumped overnight following the Fed decision, with the S&P 500 rising nearly 3% to 4,300.17. The Dow Jones Industrial Average surged 932.27 points, or 2.81%, to 34,061.06. The Nasdaq Composite soared 3.19% to 12,964.86.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 102.549 following a recent decline from above 103.

The Japanese yen traded at 129.13 per dollar, stronger as compared to levels above 130 seen against the greenback yesterday. The Australian dollar changed hands at $0.7257 after a recent surge from below $0.721.

— CNBC’s Jeff Cox contributed to this report.