Wall Street took in stride the Federal Reserve's clearly-telegraphed decision Wednesday to begin to scale back its stimulus program, and major equity indices pushed to fresh records.

For the fourth straight day, all three major US indices ended at all-time highs, with the broad-based S&P 500 gaining 0.7 percent to 4,660.57.

The records came after a mixed day for European and Asian equities and as oil prices retreated.

Fed chief Jerome Powell stuck to his view that current higher-than-expected inflation levels will come down in the second half of 2022, and said the US central bank "can be patient" about raising interest rates.

Despite inflation trends that have prompted questions about whether Fed officials have misread the situation, Powell, who is awaiting word on whether President Joe Biden will name him for a second term, defended his patient stance.

"I don't think we are behind the curve. I believe policy is well-positioned to address the range of plausible outcomes."

Major US indices were in negative territory much of the day, but pushed upward after the Fed announcement.

"It's natural to get nervous about a potential surprise," Art Hogan, chief strategist at National Securities said of the early trading.

But, "You got exactly what you expected," he said.

Prior to the Fed announcement, new data showed the recovery in continuing. Data from payroll services firm ADP said private businesses hired 571,000 workers last month, a better-than-expected figure that comes ahead of Friday's important US government jobs report for October.

And the Institute for Supply Management said its US services sector activity index hit an all-time high in October, fueled by big gains in new orders and business activity.

Earlier in Europe, London closed lower and Frankfurt ended the day flat, while Paris rose to break an intra-day record high that had stood for 21 years and set a record close for a second day running.

"If there is no sign of stress across... markets, it's mostly because we all think we know what will come out from today's (Fed) meeting: a gradual start of the tapering of the bond purchases programme," said SwissQuote analyst Ipek Ozkardeskaya.

The Fed's move comes as other central banks have already lifted borrowing costs or started to tighten the purse strings.

The Bank of England is expected Thursday to raise its interest rate for the first time in more than three years to help combat soaring inflation.

But the European Central Bank is "very unlikely" to raise its interest rates even in 2022 as "the outlook for inflation over the medium term remains subdued," ECB president Christine Lagarde said Wednesday in a speech in Lisbon.

Covid surge
A fresh spike in Covid cases in parts of the country has forced officials to reimpose strict lockdown measures, including the 48-hour closure of Shanghai Disneyland Photo: AFP / STR

New York - Dow: UP 0.3 percent at 36,157.58 (close)

New York - S&P 500: UP 0.7 percent at 4,660.57 (close)

New York - Nasdaq: UP 1.0 percent at 15,811.58 (close)

London - FTSE 100: DOWN 0.4 percent at 7,248.89 (close)

Frankfurt - DAX: FLAT at 15,959.98 (close)

Paris - CAC 40: UP 0.3 percent at 6,950.65 (close)

EURO STOXX 50: UP 0.3 percent at 4,309.61 (close)

Hong Kong - Hang Seng Index: DOWN 0.3 percent at 25,024.75 (close)

Shanghai - Composite: DOWN 0.2 percent at 3,498.54 (close)

Tokyo - Nikkei 225: Closed for a holiday

Euro/dollar: UP at $1.1614 from $1.1579 at 2100 GMT Tuesday

Dollar/yen: UP at 114.02 from 113.96 yen

Pound/dollar: UP at $1.3687 from $1.3612

Euro/pound: DOWN at 84.83 pence from 85.06 pence

Brent North Sea crude: DOWN 3.2 percent at $81.99 per barrel

West Texas Intermediate: DOWN 3.6 percent at $80.86 per barrel

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