Wall Street gains modestly after Fed signals rates to hold steady for some time

By Lewis Krauskopf

(Reuters) - The benchmark S&P 500 stock index slightly extended modest gains on Wednesday after the U.S. Federal Reserve held interest rates steady and signalled that borrowing costs are likely to remain unchanged indefinitely.

The U.S. central bank said moderate economic growth and low unemployment are expected to continue through next year's presidential election.

After cutting rates three times earlier this year, the Fed left its benchmark rate at the target range of between 1.50% and 1.75%, a decision that was widely expected.

"You are looking at a cautiously optimistic Fed," said Karl Schamotta, chief market strategist at Cambridge Global Payments in Toronto. "The tone that you see through the statement and projections suggest that they believe that they have taken out enough insurance to prevent a downturn."

With the Fed expected to stand pat on rates, investors have been more focused on U.S.-China trade relations, including new tariffs on Chinese goods that could go into effect on Dec. 15.

The Dow Jones Industrial Average <.DJI> rose 5.65 points, or 0.02%, to 27,887.37, the S&P 500 <.SPX> gained 7.43 points, or 0.24%, to 3,139.95 and the Nasdaq Composite <.IXIC> added 30.05 points, or 0.35%, to 8,646.23.

Most S&P 500 sectors were higher, with materials <.SPLRCM> and technology <.SPLRCT> leading the way.

(Reporting by Lewis Krauskopf in New York; Additional reporting by Saqib Iqbal Ahmed in New York, Shreyashi Sanyal and Arjun Panchadar in Bengaluru; Editing by Leslie Adler)