Wall Street gained on Wednesday after the U.S. Federal Reserve said it would end its pandemic-era bond purchases in March as it exits from policies enacted at the start of the health crisis.

Following its two-day policy meeting, the Fed signaled its inflation target has been met, and its announcement on ending the bond purchases paved the way for three quarter-percentage-point interest rate increases by the end of 2022.

All three main U.S. stock indexes reversed earlier losses and climbed well into positive territory.

Wall Street remains down this week after the S&P 500 index touched a record closing high on Friday, with worries about the new fast-spreading omicron coronavirus variant giving investors pause.

"The Fed didn’t throw any curve balls. This is widely as expected," said Ryan Detrick, chief market strategist at LPL Financial, in Charlotte, North Carolina. "(This week’s selloff) was a combination of consolidating gains from the week before but also some skittishness ahead of what was potentially the last major market event of this year."

The Dow Jones Industrial Average was up 0.29% at 35,646.5, while the S&P 500 gained 0.31% to 4,648.6.

The Nasdaq Composite added 0.09% to 15,251.62.

Inflation and higher interest rates have become a major concern on Wall Street in recent months. Data on Tuesday showed producer prices increased more than expected in the 12 months through November, clocking its largest gain since 2010. Last week's consumer prices data showed the biggest gain in almost four decades.

Most of the 11 major S&P 500 sector indexes were higher, led by a 1.1% gain in utilities.

U.S. retail sales rose 0.3% last month, the Commerce Department said, coming in lower than expected as Americans started their holiday shopping early to avoid shortages and paying more for goods.

Apple Inc rose 0.8% and Nvidia rallied 2.6%, with both lifting the S&P 500 more than any other stock.

Albemarle Corp and Livent Corp each fell about 2.8% after Goldman Sachs downgraded both the lithium producers to "sell" from "neutral."