Investing.com-- The S&P 500 jumped Wednesday as the Federal Reserve left interest rates unchanged and continued to forecast two-rate cuts ahead despite acknowledging a more stubborn path for inflation.

At 4:00 p.m. ET (20:00 GMT), the Dow Jones Industrial Average gained 383 points, or 0.9%, the S&P 500 index advanced 1.1%, and the NASDAQ Composite rose 1.4%.

Fed keeps rates on hold

The Federal Reserve left interest rates unchanged Wednesday, and continued to forecast two rate cuts for this year even as it now expects a tougher battle against inflation.

The Federal Open Market Committee, the FOMC, left its benchmark rate unchanged in a range of 4.25% to 4.5%.

Fed members see the benchmark rate falling to 3.9% this year, suggesting two rate cuts, unchanged from the prior forecast in December. The rate-cut outlook for 2026 and 2027 were also unchanged at 3.4% and 3.1%, respectively.

The unchanged rate-cut outlook comes even as the Fed forecast higher inflation this year. But Fed Chairman Jerome Powell suggested the weaker growth may help offset the higher inflation.

"In his press conference after the meeting, Fed Chair Powell noted that sentiment indicators have weakened recently, but hard data continue to suggest that economic conditions, including the labor market, are solid," Brian Rose, Senior US Economist, UBS Global Wealth Management said following the event. "Regarding inflation, Powell said that the Fed’s forecasts now incorporate the impact of tariffs. The forecasts for 2026 and 2027 were unchanged from December, and Powell also noted that most measures of longer-run inflation expectations remain well anchored to the Fed’s 2% target."

"Our view remains that the Fed will be willing to look through the short-term impact of tariffs on prices, and would cut rates in response to signs of weakness in the labor market even if inflation remains around its current level," Rose added.

Tesla gains on robotaxi news; Boeing jumps on CEO remarks, Nvidia gains

In the corporate sector, Tesla (NASDAQ:TSLA) stock rose over 4% after the EV manufacturer took a step toward launching its long-promised robotaxi service in California, securing the first of several necessary approvals.

The California Public Utilities Commission (CPUC) granted Tesla a transportation charter-party carrier (TCP) permit, which is typically issued for chauffeur-driven services. This license allows the company to manage a fleet of vehicles and transport employees on scheduled trips.

Elsewhere, General Mills (NYSE:GIS) stock fell 2% after the food manufacturer forecast a sharp decline in annual sales and profit, hit by increased competition from cheaper private label brands.

Boeing Co (NYSE:BA), meanwhile, jumped 7% after the aircraft maker’s CFO Brain West touted improving operational performance.

NVIDIA Corporation (NASDAQ:NVDA) rose more than 2% as Nvidia’s CEO Jensen Huang said that the "impact of tariffs won’t be meaningful" in the near term.

(Peter Nurse, Ambar Warrick contributed to this article.)