The US stock market ended higher on Wednesday after the Federal Reserve cut its main interest rate to bolster the job market.

The S&P 500 climbed 0.7 percent and finished just shy of its all-time high, which was set in October. The Dow jumped 497 points, or 1 percent, and the Nasdaq rose 0.3 percent.

Wall Street loves lower interest rates because they can boost the economy and send prices for investments higher, even if they potentially make inflation worse.

Wednesday's cut to interest rates was widely expected and did not move markets much by itself. But some investors found encouragement from comments by Fed Chair Jerome Powell, which they said were less forceful about shutting down the possibility of future cuts than they had been anticipating.

Powell said again on Wednesday that the central bank is in a difficult spot, because the job market is facing downward pressure when inflation is simultaneously facing upward pressure. By trying to fix one of those problems with interest rates, the Fed usually worsens the other in the short term.

Powell also said for the first time in this rate-cutting campaign that interest rates are back in a place where they're pushing neither inflation nor the job market higher or lower. That gives the Fed time to hold and reassess what to do next with interest rates as more data comes in on the job market and on inflation.

“We are well positioned to wait and see how the economy evolves,” Powell said.

But he also said no one at the Fed is expecting a hike to interest rates in their “base case” anytime soon, and he spent much of his discussion in a press conference following the rate announcement talking about the job market.

In Wednesday's vote, two Fed officials voted against the cut of a quarter percentage point because they did not want to reduce rates now. A third official, meanwhile, voted against Wednesday's cut because he wanted a deeper reduction of half a percentage point.

The S&P 500 rose 46 points to 6,886. The Dow jumped 497 points to 48,057, and the Nasdaq gained 77 points to 23,654. (AP)