Stocks fell and bond yields rose on Wall Street Wednesday after the Federal Reserve lowered its key interest rate for the first time in a decade but left investors feeling uncertain about the likelihood of further cuts.

The quarter-point cut announced by the central bank was widely expected, so investors focused on Chairman Jerome Powell's remarks during a news conference for hints about the Fed's future plans.

Powell said that there could be more cuts, but that the central bank was not intending to embark on a long cycle of lowering interest rates. He characterized the rate cut as a "mid-cycle adjustment."

The remarks sent stocks into a skid that briefly knocked the Dow Jones Industrial Average down more than 470 points. Prices of short-term U.S. government bonds fell, sending yields higher.

Stocks erased some of their losses later during Powell's news conference, when he seemed to shift his message to leave open the possibility that the Fed would cut rates again.

"Clearly, the market is disappointed," said Quincy Krosby, chief market strategist at Prudential Financial. "They wanted a more emphatic message from the Fed that this was in fact the beginning of a trend."

The S&P 500 index dropped 32.80 points, or 1.1%, to 2,980.38. The benchmark index had its worst day in two months. It hit an all-time high just last Friday.

The Dow Jones Industrial Average lost 333.75 points, or 1.2%, to 26,864.27. The Dow was briefly down 478 points.

The Nasdaq composite fell 98.19 points, or 1.2%, to 8,175.42. The Russell 2000 index of smaller companies slid 10.99 points, or 0.7%, to 1,574.61.

Trading was muted for much of Wednesday until the Fed issued its interest rate policy statement at 2 p.m.

The rate cut was widely expected, so the market didn't have much of an initial reaction. That changed swiftly as Powell spoke, casting doubt on the prospects for further rate cuts.

"The market was expecting a cut of 25 basis points with an actively dovish message, meaning there would be more rate cuts coming," Krosby said. "But once he started to talk about the fact that this was a mid-cycle adjustment ... the market always wants more."

The Fed hopes the rate cut will counter threats to the U.S. economy ranging from uncertainties caused by the nation's trade disputes to chronically low inflation and a dimming global growth outlook.

Fed officials had signaled in recent weeks their readiness to take action to help shore up the U.S. economy, which faces threats to growth from the prolonged trade war with China.

The central bank cut its benchmark rate by a quarter-point to a range of 2% to 2.25%. It's the first rate cut since December 2008 during the depths of the Great Recession, when the Fed slashed its rate to a record low near zero and kept it there until 2015. After that, the Fed went on to make nine quarter-point rate increases from December 2015 to December 2018.


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