Live Markets-Wall Street drops as Fed keeps rates steady, inflation worries remain

Major U.S. stock indexes each ended at least 1% lower on Wednesday as the Federal Reserve held interest rates steady, while inflation worries remained high and Treasury yields jumped.

Stocks pared losses in the wake of the decision and following Fed Chair Kevin Warsh's comments but then sharply added to declines late in the session.

At its low of the day, the Nasdaq .IXIC was down 10.17% from its June 1 record intraday high. But the index ended down 9.78% from its record closing high. The Dow .DJI led the day's decline, ending 2.2% lower.

Industrials .SPLRCI and tech .SPLRCT were the biggest losers among S&P 500 .SPX sectors.

After the closing bell, Meta META.O missed its earnings expectations and narrowed the range of its forecast for annual capital expenditure. Its shares were down more than 7% in extended trading.

The Fed's widely expected decision to leave the benchmark interest rate in the 3.50%-3.75% range drew dissents from three of the 12 members of the policy-setting Federal Open Market Committee who "preferred" a quarter-percentage-point hike at this meeting.

The Fed's choice to leave rates unchanged may fuel further questions about how Warsh will deliver on his commitment to bring inflation back down to the 2% target.

“As we expected, the Fed left rates unchanged. The biggest change seems to be a growing number of dissenters from the last vote with now a few more voting members in favor of hiking rates," said Steve Kolano, chief investment officer at Integrated Partners in Waltham, Massachusetts.

Ryan Detrick, chief market strategist at Carson Group in Omaha, said, “The bigger question now though becomes how much pressure will they have to hike in September? Inflation is running hot and with surging crude oil, the market expects the next hike to indeed be in September.”