U.S. stocks lost ground Wednesday, snapping a two-day winning streak, as the Federal Reserve's policy meeting statement hinted at an earlier interest rate hike than previously expected.
The Dow Jones Industrial Average fell 114.02 points, or 0.70 percent, to 16,222.17. The S&P 500 dropped 11.48 points, or 0.61 percent, to 1,860.77. The Nasdaq Composite Index shed 25.71 points, or 0.59 percent, to 4,307.60.
After fluctuating narrowly in earlier trading session, the market expanded losses shortly after the release of the Fed's statement, according to which 10 of 16 top policy makers forecast that federal funds rate would rise to 1 percent or higher by the end of 2015, earlier than in December.
The U.S. central bank also decided to continue to cut bond buying by another 10 billion U.S. dollars as anticipated.
U.S. stocks accelerated decreasing before recouping part of losses at the close, as Janet Yellen said in her first press conference as the Fed's chair following the policy meeting that there could be a six-month gap before rate hikes after bond buying ends.
The Fed also updated its forward guidance to drop the 6.5 percent unemployment rate as threshold for considering hiking interest rates, while emphasizing that the change in the guidance does not indicate any change in the Federal Open Market Committee' s policy intentions.
The economic calendar is relatively light in the day. U.S. mortgage applications decreased 1.2 percent in the week ending March 14, according to the Mortgage Bankers Association.
In corporate news, FedEx Corp. posted Wednesday its earnings and revenues in the third fiscal quarter, both missing market expectations. However, the bellwether's shares reacted little to the disappointing results, falling 0.14 percent to 138.38 dollars, as unusually severe winter storms were blamed for the company's decreasing shipping volume and increasing costs.
U.S. stocks rallied for a second straight day Tuesday on eased worries over the Ukraine crisis after Russian President Vladimir Putin made clear that Russia had no intention to split Ukraine and did not seek confrontation with its partners.
The CBOE Volatility Index, widely considered as a fear gauge of the market, increased 4.13 percent to end at 15.12 Wednesday.
U.S. oil price gained Wednesday as the Fed gave no surprise by keeping its tapering process of its monthly asset purchases. Light, sweet crude for April delivery moved up 67 cents to settle at 100. 37 U.S. dollars a barrel on the New York Mercantile Exchange, while Brent crude for May delivery lost 94 cents to close at 105. 85 dollars a barrel.
Gold futures on the COMEX division of the New York Mercantile Exchange market dropped for a third consecutive session Wednesday, with the most active gold contract for April delivery down 17.7 dollars to settle at 1,341.3 dollars per ounce.
The U.S. dollar rallied against major currencies Wednesday after the Fed cut the quantitative easing program.
In late New York trading, the euro slipped to 1.3828 dollars from 1.3929 dollars in the previous session. The dollar bought 102. 49 Japanese yen, higher than 101.53 yen of the previous session.