Dow sinks more than 500 points after Fed delivers soft rate hike but Powell pushes back on expectations of cuts this year

• US stocks fell Wednesday following the Fed's March rate decision. 
• The Fed raised raised by 25 basis points, in line with expectations. 
• But Chairman Jerome Powell said rate cuts this year at not in its baseline expectations. 

US stocks swung lower Wednesday after Federal Reserve Chairman Jerome Powell tossed cold water on speculation that policymakers are set to deliver rate hikes this year. 

Major indexes initially pushed higher soon after the Federal Open Market Committee raised the fed funds rate by 25 basis points, in line with market expectations to bring the key rate to its highest level since 2007. The rate now stands at 4.75%-5%. 

Policymakers in their statement stripped out reference to "ongoing increases" in interest rates, and its view on the terminal rate remained at 5.1%. 

But stocks turned lower after Powell in answering questions during his press conference indicated expectations of rate cuts this year were off track. "That's not our baseline expectation," he said.

Here's where US indexes at the 4:00 p.m. closing bell on Wednesday: 

•  S&P 500: 3,936.97, down 1.54%
• Dow Jones Industrial Average: 32,030.11, down 1.63% (530.49 points)
• Nasdaq Composite: 11,669.96, down 1.60%

"Not signaling a higher terminal rate should send a message to market participants that the economy may be weaker than recent economic data suggests," Charlie Ripley, senior investment strategist at Allianz Investment Management, wrote in a note. 

"Whether this meeting ends up being the one-and-done scenario or they are able to squeeze out another hike out in May remains to be seen, but the reality from here is the Fed is likely going to emphasize a broader set of conditions in policy decisions rather than focusing specifically on inflation and labor market conditions," he wrote. 

Here's what else is happening today:

• Silicon Valley Bank's parent accused the FDIC of "improper actions" to block the firm from accessing $2 billion of its cash.
• Nobel economist Paul Krugman sounded the recession alarm as banking fears mount - but shrugged off fears of another financial crisis.  
• PacWest shares tumbled as the California-based bank borrowed cash following a 20% drop in deposits. 
• The S&P 500 hasn't been this dependent on just two stocks since 1978 as Apple and Microsoft become havens.
• Nvidia stock could soar as the chipmaker's dominant position in AI is poised to reshape the tech industry, Bank of America said. 
• Mark Mobius said he is "very, very skeptical" of investing in bank stocks. 

In commodities, bonds and crypto: 

• West Texas Intermediate crude turned higher, rising 1.5% to $70.69 per barrel. Brent crude, the international benchmark, climbed 1.6% at $76.53.  
• Gold popped up 1.4% to $1,967.20 per ounce.
• The 10-year Treasury yield fell 11 basis points to 3.42%.
• Bitcoin fell 2.5% to $27,472.20.