Stocks rose on Wednesday as market participants reacted to a quarter-point interest rate hike for the Federal Reserve along with comments from Fed Chair Jerome Powell in the afternoon. The Dow Jones Industrial Average closed at a positive flatline, while the S&P 500 Index and Nasdaq Composite rose 1% and 2%, respectively.

Here's how the market settled on Wednesday:

S&P 500 Index (SPY  ): +1.05% or +42.61 points to 4,119.21

Dow Jones Industrial Average (DIA  ): +0.02% or +6.92 points to 34,092.96

Nasdaq Composite Index (QQQ  ): +2.00% or +231.77 points to 11,816.32

On Wednesday afternoon, the Federal Reserve announced another interest rate hike, this time its smallest increase in nearly a year at a quarter-point increase. Still, this hike brought the central bank's benchmark policy rate to its highest level since October 2007.

Following the Federal Open Market Committee's (FOMC) latest decision, Powell encouraged market participants by acknowledging that inflation is beginning to fall in response to the Fed's aggressive monetary policy efforts.

"We can now say for the first time that the disinflationary process has started. We can see that and we see it really in goods prices so far," Powell said on Wednesday.

However, the central bank remains steadfast on increasing interest rates in order to stabilize prices, with policymakers noting in their post-meeting statement that "ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation" to what the Fed considers a healthy rate of 2%.

Earlier in the session, investors reacted to the latest earnings reports from large companies. Advanced Micro Devices (AMD  ) rose over 12% after the semiconductor company reported fourth-quarter earnings that topped Wall Street expectations. Snap (SNAP  ) shares fell over 10% after the social media company reported disappointing quarterly revenue.

Peloton (PTON  ) shares jumped over 26% after the fitness equipment company said it had reduced its net loss year-over-year, with CEO Barry McCarthy calling the firm's results a "turning point" for the company.

Elsewhere in economic news, ADP reported U.S. private payrolls rose by a less-than-expected 106,000 in January. This report offers clues for the upcoming "official" monthly jobs report due out on Friday, where economists expects the U.S. economy to add 187,000 jobs last month.

The Bureau of Labor Statistics reported Wednesday that job openings rose in December despite the central bank's aggressive efforts to cool the labor market. December had about 11 million openings for the month, up from 10.44 million in November, according to government data.

Manufacturing activity contracted in January, according to the ISM's latest survey. The institution's manufacturing Purchasing Managers Index (PMI) came in at 47.4%, with readings below the neutral level of 50 signaling contraction in the sector.

Looking ahead, traders will further digest the Fed's latest policy decision on Thursday, as well as earnings from Meta Platforms (META  ).