Market Volatility Falls Further After Fed Keeps Rates Unchanged

The S&P 500 closed slightly higher on Wednesday after the Federal Reserve kept interest rates unchanged.

The central bank, however, said that there could be two more rate hikes scheduled for later in the year. Traders now see a 63% chance that the Fed will increase interest rates in July.

Earlier on Wednesday, producer prices for final demand fell 0.3% month-over-month in May versus a 0.2% increase in April, and compared to market expectations for a 0.1% decline.

UnitedHealth Group Inc UNH shares dropped over 6% on Wednesday after the company's CEO highlighted an increase in elevated volumes of non-urgent surgeries, which has increased fears of higher costs for insurers.

Advanced Micro Devices, Inc. AMD shares gained more than 2% on Wednesday following a report suggesting Amazon.com Inc's AMZN cloud unit is considering using the company's AI chips.

Majority of sectors on the S&P 500 closed on a negative note, with energy and health care stocks recording the biggest losses on Wednesday. However, information technology and consumer staples stocks closing higher during the session.

The Nasdaq 100 rose 0.70% to close at 15,005.69 on Wednesday, amid gains in shares of NVIDIA Corp NVDA and Microsoft Corp MSFT.

The S&P 500 rose 0.08%, while the Dow Jones fell 0.68% to 33,979.33 in the previous session.

The Chicago Board Options Exchange's CBOE Volatility Index (VIX) fell 5% to close at 13.88 on Wednesday.

What is CBOE Volatility Index?

The CBOE Volatility Index, popularly known as VIX, is a measure of the equity market's expectation of volatility based on S&P 500 index call and put options.

Read Next: $10M Bet On GameStop? Check Out These 3 Stocks Insiders Are Buying