The U.S. stock markets fell Wednesday after the Federal Reserve announced it would not raise its key interest rate.
By market close, the blue chip Dow Jones Industrial Average was down about 220 points, or 1.49 percent; the Standard & Poor's 500 index was down 1.1 percent, and the tech-heavy Nasdaq had plunged more than 2 percent.
The Fed statement said the stock markets have been turbulent across the world since it decided to raise the rates in December from a record low; oil prices have skidded and China has struggled to manage a slowdown in the world’s second biggest economy.
The U.S. central bank is "closely monitoring global economic and financial developments and is assessing their implications for the labor market and inflation, and for the balance of risks to the outlook," the statement said.
Fed policymakers left their benchmark rate unchanged in a range of 0.25 percent to 0.5 percent. And the Fed did not signal whether it would raise rates at its next meeting in March.
While the Fed acknowledged that the U.S. economy has slowed down, it noted that the labor market has “improved further” and that inflation is well below the central bank's 2 percent target. Consumer spending also has remained strong, and government data released Wednesday showed new home sales surged in December, capping what was the best year since 2007.
The Fed said it anticipates that inflation will remain low in the short term, but reiterated its confidence that the effects of falling oil and commodity prices are "transitory."