NEW YORK (TheStreet) -- The Federal Reserve acted as usual on Wednesday. Its statement, much like others before it, was confusing and said little new as to exactly when the central bank might raise rates.

Still, investors rejoiced as stocks rallied on news that Chair Janet Yellen and her colleagues didn't drastically change their conservative tone. The Fed said it would remain "patient" in determining when to raise rates and that a hike earlier than the next couple of months was unlikely.

Gaining momentum into the close, the S&P 500 peaked 2% and the Nasdaq gained 2.1%. The Dow Jones Industrial Average enjoyed its best day of the year, climbing 287 points.

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"The committee considers it unlikely to begin the normalization process for at least the next couple of meetings," said Yellen in a conference. "This assessment, of course, is completely data dependent."

This timeline is as expected, said Wells Fargo's Cameron Hinds. "Market consensus is that they will start to raise rates during the next summer," he said. "Based on the Fed meeting schedule, Chair Yellen saying it's unlikely they will raise rates for the next couple of meetings is in line with that."

The Fed kept its previous phrase "considerable time" in the statement but only in saying that its new phrasing is "consistent" with previous language, noting the change was to better reflect an improving economy and tightening labor market. "They're starting to subtly change the paragraph but there's not a big change," said U.S. Bank's Patty Edwards in a call. "We are the world's largest economy and with everyone else in the world slowing, the last thing they want to do is throw cold water on what we've got going."

The statement comes at a time of increased volatility in the marketplace against a backdrop of plunging oil prices, softer domestic housing data, weaker economic figures coming out of China, and the Russian economy in freefall.

Crude prices recovered from deep losses suffered earlier after Russian officials said 2015 output would be similar to this year's at 10.6 million barrels a day. West Texas Intermediate was up 0.3% to $56.11, though remaining at nearly half of the mid-summer peak.

"It's not the bottom. We're going to have these bounces. There's short covering in the futures market," said Jeff Sica, CIO of Circle Squared Alternative Investments, over the phone. "We're going to see a continuation of the selling based primarily on the fact that there's significantly less demand than anyone anticipated... It's way too soon to call bottom on oil prices." 

Large-cap oil stocks including Exxon Mobil (XOM) - Get Report , Chevron (CVX) - Get Report and Royal Dutch Shell (RDS.A) rallied. The Energy Select SectorSPDR ETF (XLE) - Get Report spiked 4.2%, though it remains more than 12% lower for the year.

In an address Wednesday, President Obama said the U.S. will restore diplomatic relations with Cuba and open an embassy in Havana for the first time in half a century. Earlier, American contractor Alan Gross was released from Cuban prison after being held captive for five years.

Herzfeld Caribbean Basin Fund (CUBA) - Get Report , which invests in companies in countries within the Caribbean Basin including Cuba, rocketed around 26% higher at volume more than 900 times its daily average.

American Apparel (APP) surged more than 17% after the company terminated controversial former CEO Dov Charney's employment, six months after he was ousted as head of the company. Paula Schneider has been named as his replacement.

Volcano (VOLC)  exploded 55% after Phillips (PHG) - Get Report announced it was acquiring the medical equipment developer for $18 a share, a 57% premium to Tuesday's close. Tesla (TSLA) - Get Report bucked earlier losses after Morgan Stanley reduced its price target to $290 and cut the company's estimated unit deliveries through to 2020. Shares were 4.1% higher.

FedEx (FDX) - Get Report shares were down more than 3% after missing second-quarter earnings and revenue expectations. The company reiterated its previous full-year forecast and said it expects a "modest" boost from lower fuel prices. Competitor UPS (UPS) - Get Report moved lower in sympathy.

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--Written by Keris Alison Lahiff in New York.