Wall Street fell after Fed's decision on interest rates

Market Update: Stocks Retreat as Inflation Report Builds Hawkish Case for Federal Reserve

The Fed's statement also had no mention of the trade tensions that some economists have warned could impact the economic outlook both in the US and overseas.

Market participants may be starting to wonder that "perhaps this is as good as it's going to get", Innes said, referring to corporate profits.

- The S&P 500 Index declined 0.7 percent as of 4:01 p.m. That was down from 2.9 percent in the fourth quarter even though the tax cuts kicked in on January 1. However, the recent weakness is likely to be temporary and we think that the EUR and the GBP are likely to bounce back: EUR/USD to $1.20-1.22 levels and GBP/USD to $1.39-1.41 levels by June-end as political and economic concerns return in the US and growth gains momentum in Europe.

The dollar index, which tracks the greenback against six major peers, was down 0.15 percent at 92.314 in late trading.

The U.S. Federal Reserve on Wednesday kept the interest rates unchanged, in line with market expectation, while expressing confidence that inflation is near its 2-percent target.

Yesterday the Federal Open Market Committee (FOMC) - the policymaking arm of the Federal Reserve - finished its May meeting.

The central bank is due to announce its decision at 2 p.m. EDT (1800 GMT) on Wednesday. It was Jerome Powell's second meeting as chairman since succeeding Janet Yellen earlier this year.

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Many people, including Wall, still see the dollar failing to extend its recent surge, given the United States needs a weaker currency to fix its deficit and the Fed's awareness of the knock-on effects on developing countries of a rampant dollar.

"The addition of liquidity suggests to markets that the Chinese yuan trade-weighted index appreciation trend was set to pause, in turn suggesting implicit dollar strength", Morgan Stanley analysts told clients. On Tuesday, it had risen to a high near 92.57, its highest level in almost four months.

But dollar appreciation could also feed more gains, should it persuade overseas investors to buy US debt without hedging currency exposure.

The South African Rand is showing some indications of recovery against the US Dollar in the aftermath of the latest FOMC statement.

Investors are next focused on Friday's US employment report for April for further indications of the strength of the economy and inflation pressures.

- West Texas Intermediate crude gained 0.7 percent to $67.73 a barrel, the biggest gain in two weeks.

The Dow fell as declines in shares of Verizon and those of Travelers, recently down 2.1 percent and 1.6 percent respectively, outweighed rallies in shares of Apple and those of General Electric, recently up 5 percent and 1.7 percent respectively. The Singapore Dollar on the other hand is showing signs of increased momentum against the US Dollar with the USDSGD now 0.32% lower for the day.

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