Fed Raises Rates, Oil Prices Drop as Wall Street Holds Steady

The U.S. stock market held steady on Wednesday after the Federal Reserve raised interest rates for the first time in three years to combat high inflation.

The Fed hiked interest rates by a small margin, with the median official expecting the federal funds rate to end this year at 4.1%, up from the current range of 3.75% to 4%. The move aims to bring inflation back down to 2% and curb its long-term impact on the economy.

The stock market's stability was also helped by a drop in oil prices, with Brent crude falling 2.9% to $105.63, and easing pressure from the bond market. The yield on the 10-year Treasury dropped to 4.95%, down from 5.00% late Tuesday.

Despite this, investors remain cautious, as high oil prices are a major contributor to inflation. Fed officials also signaled that at least one more rate increase is likely ahead.