By Alexander Osipovich and Will Horner

Major U.S. stock indexes were little changed Wednesday after the Federal Reserve said it would stick to the loose monetary policy that has underpinned the market's rally in recent months.

The S&P 500 rose less than 0.1% in afternoon trading after the Fed held its key interest rate near zero and said it would continue bond purchases to support the economic recovery.

The Dow Jones Industrial Average declined 0.4%, while the technology-heavy Nasdaq Composite slipped less than 0.1%.

In a press conference Wednesday, Fed Chairman Jerome Powell stressed that recent gains in inflation had been due to transitory factors and that the economy would need to make "substantial further progress" before the U.S. central bank would begin tapering asset purchases. That assured investors who have worried that the Fed might shift to a more inflation-fighting posture.

"He is letting investors know exactly what they want to hear--that he is going to be very supportive of markets for a very long time," said Michael Arone, chief investment strategist at State Street Global Advisors.

Stocks have been hovering near record levels as the corporate earnings season has gotten off to a a better-than-expected start and data has shown new signs of the economy recovering from the Covid-19 pandemic. Still, there is some concern about President Biden's planned tax increases and the surge in coronavirus cases in India.

"The market [is waiting] to see whether we are going to get another breakout in the economic data, how the recovery is progressing and how much stimulus is going to go through," said Willem Sels, global chief investment officer at HSBC Private Bank. "We are seeing some trade-off between stronger earnings now, which is a positive, and the fear that higher taxes to come could offset that."

Investors are paying close attention to earnings this week, including from some of the country's biggest technology companies. Earnings must cross a high hurdle to support stocks' rich valuations. They could also show how tech companies are coping with changing consumer habits as lockdown restrictions ease.

Apple, Facebook and chip maker Qualcomm are expected to post results after markets close, as is Ford Motor.

"There hasn't been a huge reaction to earnings. The market had anticipated a lot of the improvement because it is reflective of what is happening in the economic data," said Mr. Sels. "That is why earnings season is all about whether there are new messages, for example, around production and input costs."

Google's parent company Alphabet gained 3.9% after reporting results late Tuesday. The tech giant posted record sales for the first quarter, driven by digital ad spending.

Boeing fell 2.7%, weighing on the Dow, after the aircraft maker reported its seventh consecutive quarterly loss and booked a charge on its work replacing Air Force One presidential jets because of problems with a supplier.

Spotify Technology slumped 10% after saying that user growth had softened in the first quarter. Pinterest tumbled 14% after the social media company added fewer users than analysts expected.

Texas Instruments slid 3.8% after the semiconductor maker said it expected second-quarter revenue to be less than analysts had been forecasting.

President Biden is set to outline some of his plans to raise taxes on the highest earning Americans at a speech later Wednesday. The plans are part of a $1.8 trillion proposal that includes new spending on child care and education.

In bond markets, the yield on the 10-year Treasury note slipped to 1.621%, from 1.622% Tuesday. Bond yields rise as prices fall.

Overseas, the pan-continental Stoxx Europe 600 rose less than 0.1%. Among individual stocks, Deutsche Bank jumped more than 10% after reporting its strongest quarterly earnings in seven years.

Most major Asian markets posted gains. Japan's Nikkei 225 rose 0.2% while Hong Kong's Hang Seng added 0.5%. The Shanghai Composite Index rose 0.4%.

Write to Alexander Osipovich at alexander.osipovich@dowjones.com and Will Horner at William.Horner@wsj.com

(END) Dow Jones Newswires

04-28-21 1557ET