NEW YORK (TheStreet) -- Yes, the Federal Reserve is no longer "patient" when it comes to raising interest rates. No, it's not the most important piece of information that came out of the March meeting announcement.
Instead, what had markets celebrating was the slower-than-expected rate at which rate hikes would occur. Top officials now expect the federal funds rate to end 2015 at 0.625%, down from previously expected 1.125%. The funds rate is expected to end 2016 at 1.875%, down from 2.5%.
"The most positive thing for investors was the projected trajectory of rates coming down," said Gary Thayer, head of macro strategy at Wells Fargo Investment Institute. "The Fed is still indicating it is prepared to raise rates but not as aggressively as a lot of investors had expected."
Markets shot into positive territory after the dovish announcement. The S&P 500 was up 1.2%, the Dow Jones Industrial Average added 1.3%, and the Nasdaq climbed 0.92%.
In the lead-up to the announcement, investors had been particularly keen to see whether the "patient" phrasing would be removed, a yardstick demonstrating that the Fed was feeling more comfortable moving ahead with a rate hike for the first time in nine years.
But while that phrasing was missing from the Fed's forward guidance, it didn't automatically mean a rate hike was on the immediate horizon, the Fed said.
"Just because we removed the word 'patient' from the statement doesn't mean we're going to be impatient," said Fed Chair Janet Yellen in a press conference following the announcement.
Elaborating on its economic view, the Fed said that since its January meeting economic growth has "moderated somewhat" from its solid pace of expansion seen at the end of last year.
"What's important ... is that it clearly says the [Federal Open Market Committee] is looking for 'further' improvement, meaning the economy and labor market has not yet met whatever criteria necessary to warrant a rate hike," said BTIG Research chief strategist Dan Greenhaus. "We remain of the belief the Fed will first raise rates in September."
The market rally didn't discriminate, boosting stocks and commodities, though it did deflate the U.S. dollar from its recent 12-year highs. The greenback fell 2.2% against the euro, 1.3% against the British pound, 2.1% against the Aussie dollar, and 2.7% against the Swiss franc.
Crude prices recovered from earlier losses with West Texas Intermediate surging 3% to $44.69 a barrel. Prices were lower earlier after crude inventories added 9.6 million barrels in the week ended March 13, more than double a forecast 3.7 million, according to the Energy Information Administration. Overnight, the American Petroleum Institute confirmed the trend, reporting a 10.5-million-barrel increase in crude inventories.
The energy sector led gains on the S&P 500 with major oilers including Exxon Mobil (XOM) - Get Exxon Mobil Corporation Report, Chevron (CVX) - Get Chevron Corporation Report, PetroChina (PTR) - Get PetroChina Company Limited Sponsored ADR Report, Royal Dutch Shell (RDS.A) , BP (BP) - Get BP p.l.c. Sponsored ADR Report and Total (TOT) - Get Total SA Sponsored ADR Class B Report all higher. The Energy Select Sector SPDR ETF (XLE) - Get Energy Select Sector SPDR Fund Report jumped 3%.
Other stock movers included Starbucks (SBUX) - Get Starbucks Corporation Report, which gained 1.5% after announcing a 2-for-1 stock split during its annual meeting on Wednesday. The split is scheduled for April 9.
Kraft (KRFT) added 0.28% despite announcing it will recall 242,000 Macaroni & Cheese cases, totaling 6.5 million boxes. The recall came after eight consumers complained boxes contained metal fragments.
FedEx (FDX) - Get FedEx Corporation Report dropped 1.4% as annual guidance missed estimates. Though its third quarter was better than expected, full-year earnings expectations of between $8.80 and $8.95 a share missed expectations of $8.97.
Apple (AAPL) - Get Apple Inc. (AAPL) Report will replace AT&T (T) - Get AT&T Inc. Report in the Dow Jones Industrial Average after market close Wednesday. Apple will account for just under 5% of the Dow's weight.