Strong earnings from Google Inc also helped lift stocks. Web search company Google jumped 7 percent, or $14.06, to $205.96 a day after the company reported quarterly earnings that surpassed expectations. Rival Yahoo Inc climbed 2.3 percent, or 79 cents, to $35.54.
After the bell, shares of online retailer Amazon.com Inc fell nearly 14 percent to $36.15 after it missed Wall Street estimates.
The Dow Jones industrial average was up 44.85 points, or 0.43 percent, at 10,596.79. The Standard & Poor's 500 Index was up 3.78 points, or 0.32 percent, at 1,193.19. The Nasdaq Composite Index was up 6.36 points, or 0.31 percent, at 2,075.06.
Trading was active, with 1.59 billion shares changing hands on the New York Stock Exchange, above the 1.46 billion daily average for last year. About 1.96 billion shares were traded on Nasdaq, above the 1.81 billion daily average last year. Advancers outnumbered decliners on the New York Stock Exchange by about 5 to 3 and by about 9 to 7 on Nasdaq.
The Fed's 25-basis-point interest-rate hike was widely expected so investors were more focused on the accompanying statement.
"I think this was a decision that was very well anticipated. The Fed has been very clear throughout this tightening cycle that they will tighten at a measured pace," said Tim Ghriskey, chief investment officer of Solaris Asset Management in Bedford Hills, New York.
"The Fed telegraphed this series of rate increases extremely well and there have been absolutely no surprises - so the market pretty much yawns at it. It knows what the Fed's going to do and they're doing it. The only question is at what level does the Fed say, 'We've had enough for now.' We're getting closer, but I don't believe we're there yet."
While meant to keep inflation in check, higher interest rates can weigh on stocks as they raise the cost of borrowing for companies and consumers.
Dow component Boeing Co climbed 2.3 percent, or $1.19, to $52.23. The commercial and military jet maker posted an 84 percent drop in quarterly profit on charges related to two aircraft programs, but it beat forecasts and sees stronger growth through 2006.
Software maker Adobe Systems Inc rose 7.6 percent, or $4.39, to $62.29 after it raised its current first-quarter earnings and revenue outlook.
During regular trading, Amazon's stock fell 1.4 percent, or 60 cents, to close at $41.88.
The volume of purchases of Amazon puts before Wednesday's closing bell was active, indicating that some options players were making bearish bets before the online retailer released its quarterly earnings.