05:04 PM EDT, 05/28/2025 (MT Newswires) -- US benchmark equity indexes fell Wednesday as minutes from the Federal Reserve's most recent monetary policy meeting showed that policymakers were concerned about the economic impact of tariffs.

The Dow Jones Industrial Average and the S&P 500 declined 0.6% each to close at 42,098.7 and 5,888.6, respectively. The Nasdaq Composite lost 0.5% to 19,100.9. All sectors were in the red, led by utilities.

Fed officials said that tariffs-induced upside risks to inflation could complicate the central bank's monetary policy, especially if labor market conditions weaken, minutes from its May 6-7 meeting showed.

At the meeting, the Federal Open Market Committee left its benchmark lending rate unchanged at 4.25% to 4.50% for a third straight time.

"Participants agreed that uncertainty about the economic outlook had increased further, making it appropriate to take a cautious approach until the net economic effects of the array of changes to government policies become clearer," according to the meeting minutes released Wednesday. "Participants noted that the committee might face difficult tradeoffs if inflation proves to be more persistent while the outlooks for growth and employment weaken."

US President Donald Trump in April declared a 90-day pause on certain tariffs for countries that didn't retaliate to his reciprocal duties. The US and China recently agreed to suspend most levies on each other's goods for 90 days, while the Trump administration reached a trade deal with the UK. Over the weekend, Trump agreed to extend a 50% tariff deadline for the European Union to July 9 from June 1.

TD Economics said that trade tensions have eased since the FOMC's May meeting, but the ultimate impact of tariff and other policy changes remains uncertain. "We remain of the view that today's still-elevated tariff levels will lead to some softening in domestic spending and upward pressure on inflation through the second half of this year," Thomas Feltmate, senior economist at TD, said in a report.

US Treasury yields were higher in late-afternoon trade, with the two-year rate rising 4.9 basis points to 4% and the 10-year rate climbing 4.9 basis points to 4.48%.

West Texas Intermediate crude oil was up 1.1% at $61.58 a barrel. The Organization of the Petroleum Exporting Countries and its allies on Wednesday left the cartel's output policy unchanged.

In economic news, mortgage applications in the US fell for the second consecutive week as the 30-year fixed rate for conforming loan balances logged a third straight weekly increase, the Mortgage Bankers Association said.

US Mid-Atlantic region manufacturing contraction improved in line with market expectations in May as shipments and new orders increased, data from the Federal Reserve Bank of Richmond showed.

In company news, Okta ( OKTA ) shares slumped 16% after the cloud-based access management platform late Tuesday reiterated its full-year revenue outlook and flagged potential risks related to an uncertain economic environment

Abercrombie & Fitch ( ANF ) shares jumped 15% after the apparel retailer's fiscal first-quarter results came in higher than expected, while it raised the top end of its full-year sales guidance.

Gold was down 0.3% at $3,292.30 per troy ounce, while silver fell 0.7% to $33.09 per ounce.