US stocks tumble following Fed rate decision

U.S. stocks suffered big losses Friday, as the Federal Reserve's decision to leave interest rates unchanged triggered increasing concerns about a slowdown in global growth.

The Dow Jones Industrial Average dropped 289.95 points, or 1.74 percent, to 16,384.79. The S&P 500 shed 32.12 points, or 1.61 percent, to 1,958.08. The Nasdaq Composite Index slipped 66.72 points, or 1.36 percent, to 4,827.23.

The U.S. central bank held its benchmark rate near zero on Thursday, after concluding its two-day monetary policy meeting. With no major economic data due out Friday, traders were still digesting the Fed's statement.

According to the statement, the Federal Open Market Committee (FOMC) will assess both realized and expected progress toward its objective of maximum employment and 2 percent inflation in its consideration of when to raise the benchmark interest rate.

Most Fed officials still expect a first rate increase this year, Fed Chairwoman Janet Yellen said Thursday that 13 out of 17 Federal Reserve Board members and Federal Reserve Bank presidents are looking for a move in 2015.

Some analysts believed that fears about global growth set the tone after the Fed delayed normalizing monetary policy.

Overseas stock markets largely declined Friday, dampening investor sentiment.

European shares ended sharply lower, with Germany's benchmark DAX index at Frankfurt Stock Exchange diving 3.06 percent, as the U.S. central bank's rate decision highlights a weak global economy.

In Asia, Tokyo equities also plunged Friday on the back of renewed strength in the yen, with the 225-issue Nikkei Stock Average dropping 1.96 percent.

For the week, the blue-chip Dow fell 0.3 percent, and the broader S&P 500 lost 0.2 percent, while the tech-heavy Nasdaq edged down 0.1 percent.