The Dow Jones Industrial Average fell 232.79 points, or 0.68 percent, to 33,979.33. The S&P 500 added 3.58 points, or 0.08 percent, to 4,372.59. The Nasdaq Composite Index increased 53.16 points, or 0.39 percent, to 13,626.48.
Seven of the 11 primary S&P 500 sectors ended in red, with energy and health leading the laggards by losing 1.12 percent respectively. Meanwhile, technology and consumer staples led the gainers by rising 1.14 percent and 0.56 percent, respectively.
U.S. stocks closed mixed after recovering initial losses when the Fed held its benchmark interest rate unchanged but signaled the possibility of resuming its rate-hiking campaign later this year.
The Fed decision left the benchmark funds rate in a target range of 5 percent to 5.25 percent, but forecast it would raise interest rates as high as 5.6 percent by year-end. Wednesday's monetary policy decision was interpreted by the market as a "hawkish pause."
Fed Chair Jerome Powell said at a news conference that a decision about next policy meeting in July hasn't yet been made, but he indicated more rate hikes may be coming as "nearly all policymakers view further hikes this year appropriate."
U.S. stocks initially tumbled after the Fed tried to deliver a very hawkish skip. A unanimous vote to pause the Fed's rate hiking campaign also included a very hawkish dot plot. Wall Street is not happy with the Fed's super hawkish projections, said Edward Moya, senior market analyst at OANDA, a supplier of online multi-asset trading services.
"The Fed statement and projections were very hawkish but Powell's presser was a bit optimistic regarding their inflation fight and non-committal for a July rate hike," said Moya.
In U.S. economic data on Wednesday, the producer price index (PPI) fell 0.3 percent in May, a larger decrease than expected, marking the third drop in the past four months, according to data issued by the U.S. Bureau of Labor Statistics on Wednesday. Meanwhile, the indicator of the path of inflation rose 1.1 percent on a yearly basis in May, down from the 2.3 percent increase recorded in April.
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