THE S&P 500 scored its best result since October 2013 yesterday, as the Federal Reserve gave an upbeat assessment of the economy and said it would take a patient approach toward lifting interest rates.
The rally, which followed a three-day losing streak, was also driven by a 4.2 per cent gain in the S&P energy index .
The Fed gave a strong signal that it was on track to raise interest rates sometime next year. The Fed statement came against a backdrop of solid domestic economic growth but trouble overseas.
Fed chair Janet Yellen said it was not a major concern that some banks may be leveraged and exposed to oil price moves. US and Brent oil are down roughly 50 per cent since June.
The Dow Jones industrial average rose 1.69 per cent, to 17,356.87, the S&P 500 gained 2.04 per cent, to 2,012.89 and the Nasdaq Composite climbed 2.12 per cent, to 4,644.31.
Shares of Exxon Mobil jumped three per cent to $89.02. Energy shares have which has fallen sharply with the recent heavy selloff in oil prices.
The low oil price also caused US consumer prices to the biggest drop in nearly six years in November.
Shares of the Herzfeld Caribbean Basin Fund, a closed-end mutual fund listed on Nasdaq, hit a seven-year high as President Barack Obama announced a move to normalise relations between the United States and Cuba.