US stocks closed sharply lower on Wednesday after the Federal Reserve left interest rates unchanged, with the Dow Jones Industrial Average posting its biggest one-day decline since April 2025.
The Dow Jones Industrial Average fell 1,153.18 points (2.19%) to 51,594.14. The S&P 500 dropped 1.52% to 7,316.15, and the Nasdaq Composite declined 1.74% to 24,442.94. The VIX index, a measure of market volatility, surged 13.45% to 20.66 points, its highest level in around two months.
The Federal Reserve maintained its federal funds target range at 3.5%-3.75%. Three policymakers voted in favor of an interest-rate increase. Fed Chair Kevin Warsh said the central bank would not hesitate to act when necessary.
Treasury yields rose sharply. The yield on the 10-year US Treasury note rose seven basis points to above 4.67%, while the 30-year Treasury yield climbed about 10 basis points to more than 5.2%, its highest level since 2007.
US President Donald Trump said Washington would hit Iran "hard" in response to attacks on American forces in the Middle East. US benchmark West Texas Intermediate crude rose more than 6% to settle at $84.46 per barrel.
Among individual stocks, Micron Technology and KLA each fell around 10%, while Advanced Micro Devices lost 5.5%.
European markets also declined. The pan-European Stoxx Europe 600 index fell 0.29% to 645.01 points. France's CAC 40 dropped 0.6% to 8,408.27, Germany's DAX 40 edged down 0.01% to 25,460.48, and Italy's FTSE MIB 30 declined 0.49% to 51,443.11. Britain's FTSE 100 bucked the trend, gaining 0.34% to finish at 10,908.41.