The Dow Jones Industrials swooned 270.29 points to 33,414.24.
The S&P 500 lost 28.83 points to 4,090.75.
The NASDAQ Composite dipped 55.18 points to 12,025.33.
Earlier bullish sentiment was dented somewhat after Fed Chair Jerome Powell ruled out cutting interest rates because he did not expect inflation to come down quickly enough.
However, traders were focusing on what the Fed didn’t say this time in its post-meeting statement. The central bank appeared to soften its language about future rate increases by dropping a line from the March statement that said, “the Committee anticipates that some additional policy firming may be appropriate.”
Powell commented to the press after the statement’s release that dropping that language was a “meaningful change” and that the central bank’s June decision would be driven by incoming data.
Shares of PacWest shed nearly 2% after losing about 28% the prior day. Western Alliance shares were down 4.4%.
Payroll processing firm ADP reported private payrolls data on Wednesday, which showed that hiring at private companies unexpectedly swelled in April by more than double of what economists had expected. The surge suggests that the labor market remains hot despite the Fed’s attempts to cool hiring and wage growth.
Prices for the 10-year Treasury moved up, lowering yields to 3.36% from Tuesday’s 3.42%. Treasury prices and yields move in opposite directions.
Oil prices skidded $3.48 to $68.18 U.S. a barrel.
Gold prices recovered $21.00 to $2,044.30 U.S. an ounce.