NEW YORK (AFP) - Wall Street stocks advanced on Wednesday (March 15) as oil prices jumped and the US Federal Reserve hiked the key lending rate while signalling it still sees a gradual pace for additional increases.

The gain in oil prices followed a dip in US crude commercial inventories, helping to boost the sagging crude market. ExxonMobil and Chevron both rose.

The Fed, as expected, raised the benchmark interest rate by a quarter point. But the US central bank did not suggest it would speed up future interest rate hikes as some experts had thought might happen.

"Certainly, the market fully anticipated a quarter point rate hike," said Jack Ablin, chief investment officer of BMO Private Bank.

"But the Fed has not changed its forecast. So, investors believe Federal Reserve will remain extremely accommodative for the remainder of the year."

The Dow Jones Industrial Average rose 0.5 per cent to end the day at 20,950.10.

The broad-based S&P 500 advanced 0.8 per cent to close at 2,385.26, while the tech-rich Nasdaq Composite Index gained 0.7 per cent to 5,900.05.

Petroleum-linked shares with larger gains included Halliburton, up 3.5 per cent, and Anadarko Petroleum, up 3.7 per cent.

Dow members that rose more than 1 per cent included Apple, Caterpillar, DuPont, UnitedHealth and Pfizer.

Shares of large banks were weak after the Fed did not signal additional rate hikes in 2017, with Bank of America losing 0.6 per cent and Citigroup 1 per cent.

In its quarterly economic projections, the central bankers still see the federal funds rate rising to 1.4 per cent by the end of the year, which would imply another two increases, unchanged from the previous forecast.

Some analysts had thought the Fed might boost the number to three more rate hikes this year.