Wall Street ended lower Wednesday after the Federal Reserve held U.S. interest rates steady and projected only a single rate cut for the year as officials took stock of economic risks from the U.S. and Israeli war with Iran.

New projections from U.S. central bank policymakers showed the Fed's benchmark overnight interest rate would fall by just a quarter of a percentage point by the end of this year, with no hint of timing.

Major stock indexes extended declines from before the Fed's announcement. Economists had not expected the Fed to change its interest rate.

New rate and economic projections showed the Fed largely viewing the recent surge in oil prices as having a temporary effect on inflation, with policymakers still expecting to lower rates this year and anticipating inflation to be 2.2% by the end of 2027, near the central bank's 2% target.

“They’re a bit more concerned about oil’s upward pressure on inflation while at the same time telling us that they believe the economy remains stable and solid," said Sam Stovall, an equity markets strategist at CFRA.

"The belief seems to be that the inflation situation could end up resolving itself in the near term before having a deleterious effect on the economy: that it will be a speed bump rather than a brick wall.”

Earlier, the U.S. Labor Department said the Producer Price Index rose 3.4% year-on-year, exceeding economists' 2.9% forecast, with prices at risk of accelerating further as the Middle East conflict lifts shipping and oil costs.

Brent crude extended gains and reached near $110 a barrel after an Iranian news agency reported that some facilities belonging to Iran's oil industry in South Pars and Asaluyeh were attacked.

According to preliminary data, the S&P 500 lost 91.71 points, or 1.37%, to end at 6,624.38 points, while the Nasdaq Composite lost 327.03 points, or 1.45%, to 22,152.50. The Dow Jones Industrial Average fell 793.23 points, or 1.69%, to 46,200.03.

The Middle East conflict has exacerbated volatility in global markets. However, U.S. stocks have been buoyed by a recent rebound in technology shares.

AMD gained after agreeing with Samsung Electronics to expand their strategic partnership on memory chip supplies for AI infrastructure. Nvidia dipped after securing Beijing's approval to sell its second-most-powerful artificial intelligence chips in China.

Micron Technology rose ahead of the memory chipmaker's quarterly report, due after the bell. SanDisk also gained.

Asset managers Apollo Global Management and Ares Management Corp rebounded after sharp losses in the previous week on private credit quality concerns.

Lululemon surged after the yoga-wear maker's quarterly results. Founder Chip Wilson, who is in a proxy battle with the company, said lead director David Mussafer's decision to exit the board was "a step in the right direction," and reiterated the need for a "substantial" board refresh.

Macy's jumped after the department store chain said it expected a comparatively smaller impact from tariffs in the second half of the year and beat quarterly profit estimates.