The Dow finished at another record Wednesday while the dollar retreated as the Federal Reserve lifted interest rates and the US tax cut plan moved forward in Congress.
Anticipation over the Fed's action hung over international markets ahead of the announcement, with European equity markets "treading cautiously," said a note from Schwab. London, Paris and Frankfurt all fell, along with Tokyo.
In the US, the Dow pushed to a fourth straight closing record, up 0.3 percent at 24,585.43.
Citing the strong labor market and solid economy, the Fed's policy-setting Federal Open Market Committee, as expected, increased the key lending rate to 1.25-1.5 percent, an increase of a quarter point.
Federal Reserve Chair Janet Yellen, in her final news conference, said she was not anxious about soaring US equity values.
While stock values "are on the high end of historical ranges," that could be justified in a long period of low interest rates, Yellen said.
"There's less to lose sleep about now," Yellen said, adding, "We have a much more resilient, stronger banking system. And we are not seeing some worrisome build-up in leverage or credit growth at successive levels."
Analysts said US equities also were boosted by reports that Senate and House Republican leaders reached an agreement in principal on the massive tax bill, setting the stage for final passage next week.
"The news appears to be good," said Tom Cahill of Ventura Wealth Management. "Congress is moving to an adoption of the tax cuts. The Fed indicated the economy is growing fast."
But the dollar pulled back as the US central bank again noted the meager level of inflation, which has been seen as a potential hindrance to a more aggressive pace of interest rate increases.
"The Fed offered little fuel to excite dollar bulls who have gone into seclusion this year, with the broadly weighted dollar index down 8 percent year-to-date," said Joseph Manimbo, senior market analyst at Western Union Business Solutions.
The quarterly forecasts by Fed officials showed no change in the expectations for policy moves in 2018 and 2019, with three rate hikes expected next year and one in the following year, identical to their September projections, indicating they are no more concerned about rising prices.
Monetary policy will be back in focus on Thursday with a meeting of the European Central Bank. The ECB is expected to highlight economic strength in the eurozone in new forecasts Thursday, while avoiding spooking markets with talk of further cuts to its massive support for the economy.
- Key figures around 2200 GMT -
New York - DOW: UP 0.3 percent at 24,585.43 (close)
New York - S&P 500: DOWN 0.1 percent at 2,662.85 (close)
New York - Nasdaq: UP 0.2 percent at 6,875.80 (close)
London - FTSE 100: DOWN 0.1 percent at 7,496.51 points (close)
Paris - CAC 40: DOWN 0.5 percent at 5,399.45 (close)
Frankfurt - DAX 30: DOWN 0.4 percent at 13,125.64 (close)
EURO STOXX 50: DOWN 0.5 percent at 3,581.75
Tokyo - Nikkei 225: DOWN 0.5 percent at 22,758.07 (close)
Hong Kong - Hang Seng: UP 1.5 percent at 29,222.10 (close)
Shanghai - Composite: UP 0.7 percent at 3,303.04 (close)
Euro/dollar: UP at $1.1828 from $1.1742 at 2200 GMT
Pound/dollar: UP at $1.3415 from $1.3316
Dollar/yen: DOWN at 112.56 yen from 113.56 yen
Oil - Brent North Sea: DOWN 54 cents at $62.44 per barrel
Oil - West Texas Intermediate: DOWN 54 cents at $56.60 per barrel