The Nasdaq Composite powered to another record high, nabbing the 10,000 mark, while the Dow Jones Industrial Average fell 282 points, or 1.04 percent, and the S&P 500 slid 0.53 percent..
Financial shares took a hit on the view that prolonged low rates will pressure profits.
The Fed on Wednesday confirmed it will continue to support the economy as it rebounds from its sharpest downturn of the postwar era by keeping rates near zero through 2022. The central bank sees the U.S. economy contracting by 6.5 percent this year before rebounding 5 percent in 2021.
The major averages were under pressure earlier Wednesday after a report from the Organization for Economic Co-operation and Development described long-term damage from COVID-19 shutdowns and warned that a second wave before a vaccine is developed remains possible.
"If a second outbreak occurs, triggering a return to lockdowns, world economic output is forecast to plummet 7.6 percent this year, before climbing back 2.8 percent in 2021, the alliance of wealthy nations said in a report published Tuesday on the pandemic.
Looking at stocks, Tesla shares raced to a record high after CEO Elon Musk said in a memo seen by Reuters that the electric-vehicle maker would begin producing its Semi commercial truck at “volume production.” The announcement came days after the stock-market debut of electric-truck maker Nikola Motors.
Casinos on the Las Vegas Strip continued to move toward reopening, with MGM Resorts announcing Excalibur will restart operations on Thursday and others will resume on July 1.
Movie theater chain AMC Entertainment plans to reopen most of its locations around the world in July. The company earlier this month warned it may not be able to “continue as a going concern for a reasonable period.”
Looking at earnings, online pet food retailer Chewy reported its first-quarter loss widened to 12 cents a share, from 8 cents, as sales spiked 46 percent from a year ago. The company has 15 million active customers, up 33 percent year-over-year.
Video game retailer GameStop reported revenue that fell short of Wall Street estimates but said e-commerce sales soared 519 percent from a year ago as the majority of its stores were shuttered amid the COVID-19 pandemic.
West Texas Intermediate crude oil climbed 1.69 percent to $39.60 a barrel while gold ended little changed near $1,713 an ounce.
U.S. Treasurys gained ahead of the Fed's policy decisions, pushing the yield on the 10-year note down by 2.5 basis points to 0.804 percent.
European markets were lower across the board, with Britain's FTSE down 0.1 percent while France’s CAC and Germany’s DAX fell 0.82 percent and 0.7 percent, respectively.
In Asia, China’s Shanghai Composite shed 0.42 percent while Japan’s Nikkei added 0.15 percent. Hong Kong’s Hang Seng was little changed, slipping 0.03 percent.