The S&P/TSX composite rose 52.68 points to 12,826.55 while the TSX Venture Exchange slid 0.54 points to 1,105.97.
The Canadian dollar was up 0.15 of a cent at 97.52 cents US.
The U.S. Federal Reserve said that although the economy has strengthened in the past few months, special measures still need to be taken to ensure that the unemployment rate continues to drop.
As a result, the Fed said it would keep interest rates at record lows until unemployment falls to 6.5 per cent, something it doesn't forecast happening until at least 2015. In February, the U.S. unemployment rate was down to 7.7 per cent.
The U.S. central banking system also plans on continuing to buy $85 billion a month in bonds indefinitely to keep long-term borrowing costs down.
"The Fed is not only keeping its overnight interest rates low but it's also buying assets as a way to inject money into the economy and push longer-term rates lower," said Craig Fehr, a market strategist with Edward Jones in St. Louis, Mo.
"Our view is that the ultimate withdrawal of monetary policy stimulus from the Fed is going to be a graduated process, where they first reduce asset purchases, ultimately concluding those purchases and, in the longer term, raising the short-term interest rate."
Fehr say the cautious outlook shows that it sees a rebound but is still reluctant to withdraw all stimulus.
"The fed does see some improvement in the economy but not enough to take its foot off the pedal," he said.
One of the reasons may be that it doesn't want a repeat of the last three years, where the economy looked like it was turning a corner at the beginning of the year but then did not meet expectations later on.
On Wall Street, the Dow Jones industrials was up 55.91 points to 14,511.73. The Nasdaq was ahead 25.09 points at 3,254.19 and the S&P 500 index gained 10.37 to 1,558.71.
In commodities, the April crude contract on the New York Mercantile Exchange jumped 80 cents to US$92.96 a barrel. Canadian Natural Resources Ltd. (TSX:CNQ) was up 34 cents, or 1.02 per cent at C$33.62 per share.
The May copper contract gained 0.4 cents to settle at US$3.446 a pound. Teck Resources Ltd. (TSX:TCK.B) rose 72 cents, or 2.53 per cent, to C$29.17.
April bullion fell $3.80 to US$1,607.50 an ounce. Barrick Gold Corp. (TSX:ABX) edged down half a cent a cent to C$29.59.
Shares in gold-producer Aurizon Mines Ltd. (TSX:ARZ) were the most heavily traded stock on the Toronto Stock Exchange, down 0.67 per cent to $4.45 on a volume of 22,814,226 shares. the heavy trading came a day after Alamos Gold Inc. (TSX:AGI) dropped its hostile takeover bid due to a $27.2-million break fee that would have had to be paid to white knight Hecla Mining.
Late Tuesday, Vancouver-based Aurizon said it stood by the $4.75 per share offer from Hecla over Alamos' earlier bid of $4.65 and urged shareholders to approve the deal at its next meeting.
The second-highest traded company, BlackBerry (TSX:BB), formerly known as Research in Motion, rose $1.11, or 7.2 per cent, to $16.53 on 13.1 million shares.
Meanwhile, European markets saw gains Wednesday, possibly signalling that recent fears over the financial crisis in Cyprus may have been initially overblown.
Germany's DAX closed up 0.68 per cent at 8,002.97 while the CAC-40 in France rose 1.43 per cent to 3,829.56.
Meanwhile, Cypriot markets remain closed alongside banks until at least next week.
If Cyprus doesn't work out a way to get the money it needs to qualify for an international bailout, the banks could fail, fuelling financial chaos that could eventually cause the country to leave the euro.
That's a scenario European policy-makers want to avoid for fear that an exit by one country — even one with a tiny economy like Cyprus — could spell the eventual end of the currency.
"Obviously, Cyprus in and of itself does not represent a tipping point for the global economy or the financials in Europe," Fehr said.
"But I think what has the markets' attention, and rightfully so, is that one, it represents that the European crisis continues on."
"It also highlights there are still bigger issues here at play... (such as) the potential for these types of issues to bleed over into much larger countries such as Spain and Italy have really rattled the cages of the markets more recently."
In the U.K., the FTSE 100 index of leading British shares fell 8.62 points to 6,432.70, after seeing upward movement in the morning.
On Wednesday, the country's Conservative government unveiled a tough budget that forecasted a possible third recession in a little more than four years.
George Osborne, Britain's finance minister, also says his growth forecast for this year is 0.6 per cent — half the previous estimate. He lowered the 2014 growth estimate to 1.8 per cent, down from the previous two per cent prediction.
On Thursday, investors in Canada will be watching as the federal government delivers its annual budget after markets close.
Finance Minister Jim Flaherty's eighth budget is not expected to contain any new spending programs as Ottawa continues to grapple with balancing its books within two years.