By Gunjan Banerji

Major U.S. stock indexes advanced after the Federal Reserve left interest rates unchanged but hinted it could slash rates in the months ahead.

U.S. stocks rose to session highs after the decision, which showed eight of 17 officials projecting the Fed would need to cut the benchmark rate this year. A majority of officials forecast that the benchmark rate would be below its current level by the end of 2020. Investors parsed Fed Chairman Jerome Powell's statements after the statement was released for the central bank's economic outlook and bent on cutting rates.

The Dow added 68 points, or about 0.3%. The S&P 500 added 0.3% and the Nasdaq Composite gained 0.2%. Investors weren't in a rush to make big wagers ahead of the decision Wednesday, with U.S. indexes slightly negative before its release.

"I think there's probably room for U.S. markets to move higher, in particular, equities," said Charlie Wilson, a portfolio manager at Thornburg Investment Management. "I think they probably are more likely to cut [interest rates] in the near future."

Many investors expect the Fed to slash interest rates later this year after holding them steady at this week's meeting, and the stakes were high for Wednesday's policy statement.

Such expectations alongside a brightening outlook on trade have helped major U.S. stock indexes rally toward their best June in decades. The Dow, which is up 6.9% this month, is on track for its best June performance since at least 1938. The S&P 500 has rallied 6.2% this month and is about 0.7% away from its closing record.

Meanwhile, the yield on the 10-year Treasury note slipped after the interest rate decision. The 10-year yield fell to 2.023%,its lowest level since November 2016, from 2.060% on Tuesday.

Shares of Adobe jumped 4.3% after the company reported higher revenue in its second quarter. The software company benefited from new user growth from its creative cloud apps and overseas expansion efforts. Shares of Barnes & Noble slipped 0.4% after it reported a drop in sales in its latest quarter.

Major stock indexes around the world surged Tuesday after European Central Bank President Mario Draghi signaled the ECB could cut rates and expand its bond-buying program to shore up eurozone inflation. The Bank of England is due to publish its own rate decision Thursday, though analysts don't expect Gov. Mark Carney to echo the ECB's stance.

Also adding to investors' optimism, President Trump and Chinese President Xi Jinping agreed to meet at the Group of 20 summit in Japan, sparking hopes for a trade truce and driving up U.S. indexes near their record highs.

Chinese equities led gains in Asia on Wednesday, where markets welcomed upbeat comments on trade. Hong Kong's benchmark Hang Seng Index rose 2.6%, the biggest one-day gain since November 2018. The Shanghai Composite added 1%.

Still, some analysts remained cautious about both trade talks and the outcome of the Fed meeting.

Credit Suisse's Chief Equity Strategist Jonathan Golub said that lower interest rates historically tend to translate to lower stock prices as well, and investors shouldn't think that relationship will change in the future. Additionally, Fed days haven't been good for stocks over the past year and a half.

"People forget that the reason that you need the rate cut is the economy is slowing," said JJ Kinahan, chief market strategist at TD Ameritrade.

Nathan Allen contributed to this article

Write to Gunjan Banerji at Gunjan.Banerji@wsj.com

(END) Dow Jones Newswires

June 19, 2019 15:30 ET (19:30 GMT)

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