The S&P 500 rose slightly on Wednesday amid the Federal Reserve's latest pledge to support the economy and the apparent progress in U.S. fiscal stimulus negotiations.
The broader-market index closed 0.2% higher at 3,701.17, just below a record closing high. The Nasdaq Composite gained 0.5% to end the day at 12,658.19, notching intraday and closing all-time highs, as Apple and Microsoft each popped more than 2%. The Dow Jones Industrial Average lagged, falling 44.77 points, or 0.15%, to 30,154.54.
The U.S. central bank said it will buy at least $120 billion of bonds each month "until substantial further progress has been made toward the Committee's maximum employment and price stability goals." The Fed declined to make any changes to the duration of its bond-buying program, but Chairman Jerome Powell said the central bank would increase its asset purchases if the economic recovery slows.
"The FOMC seems very committed to its current plan of action, and there is no sign that the stronger than expected economic rebound or promise of an effective vaccine roll-out has done anything to tempt them to 'taper' their enthusiasm," said Michael Shaoul, chairman and CEO of Marketfield Asset Management, in a note.
Powell added he doesn't think stocks are necessarily highly priced given how low interest rates are.
Progress made on fiscal stimulus
Congressional leaders closed in on a $900 billion rescue deal that would include a new round of direct payments to consumers. However, that package excludes a liability shield for businesses and state and local aid, CNBC has confirmed. Politico first reported the news.
The news came after House Speaker Nancy Pelosi, Senate Majority Leader Mitch McConnell, Senate Minority Leader Chuck Schumer and House Minority Leader Kevin McCarthy met Tuesday to strike a bipartisan aid deal. Treasury Secretary Steven Mnuchin called into the talks.
"I'm optimistic that we're going to be able to complete an understanding sometime soon," McConnell said Tuesday night after the meeting. Schumer said the leaders are "making progress, and hopefully we can come to an agreement soon."
"Stimulus remains a key focus for the market, as it is the necessary bridge to expansive vaccinations," Lindsey Bell, chief investment strategist for Ally Invest, told clients. "Market participants would like to see a deal sooner rather than later given the expectation for economic data to slow near-term. In the absence of a deal, turbulence could pick up."
The deadline on stimulus looms amid some of the darkest days of the pandemic. The U.S. is recording at least 212,000 new Covid-19 cases and at least 2,400 virus-related deaths each day, based on a seven-day average calculated by CNBC using Johns Hopkins University data.
Wednesday's moves were kept in check by a steeper-than-expected drop in U.S. retail sales. The Commerce Department said retail sales fell by 1.1% in November. Economists polled by Dow Jones expected a decline of 0.3%.
"Bottom line, expect a cut to Q4 GDP forecasts after the disappointing sales data," wrote Peter Boockvar, chief investment officer at Bleakley Advisory Group. "Now that we are on the cusp of handing out more money, that should help in coming months but if things aren't open, not by much except online."
Wall Street was coming off a strong session in which the major averages all gained more than 1%.
Subscribe to CNBC PRO for exclusive insights and analysis, and live business day programming from around the world.
— CNBC's Jacob Pramuk contributed to this report.