U.S. stocks fell and Treasury yields hit more multiyear highs after the Federal Reserve raised rates for the first time in more than three years. Shares of technology companies steadied near the closing bell.

The Dow Jones Industrial Average dropped 631.21 points, or 1.21%, to 51461.90, and is now down 5.3% from its record high. The S&P 500 fell 33.92 points, or 0.45%, to 7551.81 and the tech-heavy Nasdaq Composite edged down 3.15 points, or 0.01%, to 25978.42.

The yield on the policy-sensitive two-year Treasury rose 0.065 percentage point to 4.725%, the highest close since July 2024. The yield on the 10-year Treasury note rose 0.008 percentage point to 5.003%, a 19-year high. The yield on the 30-year bond declined 0.017 percentage point to 5.346%.

The Federal Reserve hiked rates by a quarter-of-a-percentage point to a range between 3.75% and 4% on Wednesday, the first increase since 2023. At the press conference following the decision, Chairman Kevin Warsh refused to say how many more rate hikes might be required to bring inflation back to the Fed's 2% target.

Stocks and bonds were relatively stable before the press conference, but sold off while Warsh was at the podium.

"He's definitely not sending clear messages," said Allyson Heumann, professor of practice at Tulane University's Freeman School of Business. "The bond market wants a plan," said Heumann, who was a bond trader before her academic career. "It wants to know where things are going, it wants to know what's going to happen in two years, what is our economy going to look like. He hasn't given any indication on what that's going to be, say, past 18 months. So the bond market is interpreting for itself."

Out of the 18 Fed officials who provide "dot plot" predictions on the outlook for policy, 12 forecast one more hike by the end of the year, and four officials anticipated two more.

Oil futures fell $3.40, or 3.2%, to $102.43 a barrel amid hopes that conflict in the Middle East would not escalate further. Attacks by Houthi rebels on Saudi Arabian energy infrastructure have raised concerns about a long-term impairment of Saudi export capabilities.

The U.S. dollar rose in the wake of the rate hike, a possible sign that foreign-exchange traders anticipate more rate increases ahead. Rate-sensitive gold futures gained in the regular session, but slipped in late trading following the Fed decision. Gold closed up $54.70, or 1.3%, at $4346.30 a troy ounce.

Strong economic data could give the Fed elbow room to continue its fight against inflation. Retail sales rose 1.2% in August to $773.9 billion, though some of the growth reflected the increase in gasoline prices.

During his press conference, Warsh said the "least well-off" Americans needed relief from inflation the most. Tulane's Heumann said the Fed's ability to control the impact of rising gasoline and commodity prices on households was limited.

"We can't suddenly open the Strait of Hormuz," Heumann said. "It's not really the gas prices...it's the diesel prices, we truck things all over our country. So the very high diesel prices are going to end up at the grocery store, end up at your Walmart, Target. We're going to be seeing prices increase if we can't get commodity prices under control."

Rising Treasury yields have been shadowed by mortgage rates, and the average rate on a 30-year home loan recently topped 7%. In one illustration of the damage wrought by the elevated mortgage rates, confidence among U.S. home builders hit the lowest level in more than a year in September, according to a survey by the National Association of Home Builders and Wells Fargo.

Tech stocks were relatively flat amid new financial developments in the artificial-intelligence sector.

OpenAI held early discussions with investors about a new funding round that could value it at more than $1.2 trillion.

Danish drug maker Novo Nordisk and Anthropic struck a partnership deal to deploy the Claude AI model with the aim of accelerating the development of new medicines. Shares of Novo fell 1.9% to $41.71.

Reckitt Benckiser, the British maker of medical and hygiene products such as Mucinex and Lysol, plans to expand U.S. product development and manufacturing to respond more quickly to shifts in consumer demand.