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The S&P 500 fell 0.5%, the Dow Jones Industrial Average gained 0.1%, 49 points, Nasdaq fell 1%.
The Federal Reserve kept rates steady on Wednesday, and kept its forecast for one more rate hike this year, but signaled a higher-for-longer rate regime by reining in the number of rate cuts for next year.
“The bottom-line is that the Fed is embracing the ‘higher for longer’ approach to getting inflation down to target,” Jefferies said in a note.
Treasury yields including the 2-Year and 10-Year yields cut intraday losses and surged to close at fresh cycle highs after the Fed decision.
The 2-year Treasury yield, which is more sensitive to interest rate decisions, closed at 5.120%, the highest level since 2006, after falling to a low of 5.049% on the day.
Growth sectors of the marketing including big tech came under pressure from rising Treasury yields, paced by a more than 2% in Alphabet (NASDAQ:GOOGL).
Meta Platforms (NASDAQ:META) and Apple (NASDAQ:AAPL) fell 1%.
Instacart ( Maplebear Inc.) (NASDAQ:CART) fell more than 10% to trade just above its IPO price of $30.
The online grocery delivery platform made its debut on Tuesday, rising as much as 40% on initial trading before ending the day up 12%.
The wobble in the stock comes just as analysts at Needham started coverage on the stock with a hold rating, citing rising competition and slowing online grocery sales.
