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S&P 500 closes flat after Fed keeps rates near zero, Dow falls 160 points

The S&P 500 closed around the flat line on Wednesday after the Federal Reserve left interest rates unchanged in its latest policy decision and hinted that it would keep easy monetary policy where it is for some time despite a strengthening economy and rising inflation.

The S&P 500 dipped 0.08% to 4,183.18, despite touching an intraday record earlier in the session. The Dow Jones Industrial Average shed 164 points to close at 33,820.38, dragged down by a 7.2% drop in Amgen's stock on disappointing earnings. The Nasdaq Composite traded lower by 0.28% to 14,051.03.

The Fed wrapped up its two-day policy meeting on Wednesday, where the central bank left rates near zero. It upgraded its assessment of the economy and acknowledged inflation was rising.

"Amid progress on vaccinations and strong policy support, indicators of economic activity and employment have strengthened," the Fed said in a statement.

"With inflation running persistently below this longer-run goal, the Committee will aim to achieve inflation moderately above 2 percent for some time so that inflation averages 2 percent over time and longer‑term inflation expectations remain well anchored at 2 percent. The Committee expects to maintain an accommodative stance of monetary policy until these outcomes are achieved," the committee added.

The S&P 500 traded to its high of the day after Fed Chairman Jerome Powell said at a press conference that it would likely take "some time" before the Fed's objectives are achieved. Powell also said it is not time yet to begin talking about tapering the Fed's monthly asset purchases.

Stocks traded off those highs, however, when Powell acknowledged that some asset prices may be high and that there may be some frothiness in equity markets.

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