04:48 PM EDT, 06/17/2026 (MT Newswires) -- The Dow Jones Industrial Average fell from record highs Wednesday as markets reacted to the Federal Reserve's first policy decision under Kevin Warsh's leadership.

The Dow shed 1% to 51,492.6 after notching back-to-back closing highs. The Nasdaq Composite dropped 1.3% to 26,021.7, while the S&P 500 fell 1.2% to 7,420.1. All sectors ended in the red, led by communication services.

The Fed kept its monetary policy steady Wednesday to mark its fourth consecutive pause, removing the so-called easing bias from its statement. Fed policymakers raised its interest rate expectations through 2028 and their inflation projections for 2026 and 2027.

It was Warsh's first policy meeting as Fed chair, replacing Jerome Powell, who remains a Fed governor.

Warsh said at a post-meeting press conference that he didn't submit his rate forecast in the dot plot, which anonymously shows individual members' expectations regarding monetary policy, CNBC reported.

"The FOMC stuck a more hawkish tone under (Warsh's) debut appearance as the new Fed chair," Thomas Feltmate, senior economist at TD Economics, said in a report.

US Treasury yields jumped in late-afternoon trade, with the two-year rate last seen up about 16 basis points at 4.23% and the 10-year rate rising five basis points to 4.5%.

"The Fed's latest message was dramatically reduced from prior releases, perhaps a precursor (to) a new Warsh era of decisively more succinct language and more limited communication from Fed officials," Stifel Chief Economist Lindsey Piegza said in a report e-mailed to MT Newswires.

West Texas Intermediate crude oil was up 0.1% at $76.14 a barrel in Wednesday late-afternoon trade, while Brent was little changed at $78.98.

A draft agreement between the US and Iran includes a mechanism for Tehran to gain access to at least $300 billion in financing, as well as a commitment from the Islamic Republic that it will never produce nuclear weapons.

A formal signing ceremony is scheduled to take place in Switzerland Friday, which would kick off a 60-day period of further talks.

US President Donald Trump said Wednesday that the proposed memorandum of understanding with Iran is "not final" and that Washington would resume military operations if he doesn't like the Tehran deal, CNBC reported.

The International Energy Agency lowered its global oil demand forecast for 2026 amid war-driven headwinds while projecting a rebound next year.

"While the US-Iran interim agreement paves the way for a rebound in Middle East (oil) exports, operational and political constraints, including prolonged demining and unresolved transit arrangements, leave downside risks to the outlook," the agency said.

In economic news, US retail sales rose more than expected in May as consumers kept spending despite higher prices, official data showed.

In company news, CarMax's ( KMX ) fiscal first-quarter earnings fell year over year as comparable used vehicle sales swung negative. The used-vehicle retailer's shares slid 9%.

Carvana ( CVNA ) shares sank 10%, the steepest decline on the S&P 500.

Gold was down 2.2% at $4,258.60 per troy ounce, while silver slumped 4.1% to $67.17 per ounce.