US indexes closed lower on Wednesday but fluctuated wildly between gains and losses after the Fed rate decision.

As the Federal Reserve slowed the pace of rate hikes while also signalling that rates might peak at greater levels than previously anticipated, US indexes closed lower on Wednesday but fluctuated wildly between gains and losses.

The Nasdaq Composite dropped 0.76%, the S&P 500 dropped 0.61%, and the Dow Jones dropped 0.42%.

The Federal Reserve increased interest rates by 0.5% and increased its prediction that rates will reach a top of 5.1% and stay there through 2023.

That exceeded the 4.6% prediction from September, which dampened Wall Street's hopes for a rate cut in the second half of 2023.  

Although few others share their confidence, the Fed has continued to forecast a soft landing for the economy.

In a note, Jefferies said, "Once again, it is difficult to think that the Fed is capable of pulling off such a careful landing of the economy onto a steady glide path towards somewhat lower growth, just slightly higher unemployment, and on-target inflation."

In the financial sector, mostly banks, took the worst blow as renewed concerns about the Fed's tightening monetary policy and sending the economy into recession were raised by its hawkish posture.

Technology stocks declined 1% as large companies traded mixed, with Microsoft Corporation and Meta Platforms Inc. closing the day in the green and Apple and Alphabet declining.

The only industry to finish the day in the green was healthcare, which was driven by another rise in Moderna as investors continued to applaud the drugmaker's good news regarding its skin cancer treatment from the day before.

In other news, Delta Air Lines reduced the majority of its gains even though it projects a rise in earnings next year, supported by strong travel demand anticipated to last through 2023.

Furthermore, oil prices increased for the third day in a row as traders turned their attention away from the significant weekly increase in U.S. oil inventories and toward the closure of the Keystone pipeline in Canada, which is crucial to refiners on the country's West Coast.

Additionally, stronger demand projections for oil from OPEC+ and the International Energy Agency, which looks after consumers' interests, added to the market's positive outlook.

(Sources: investing.com, reuters.com)