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Weekly jobless claims at 223,000

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Accenture ( ACN ) falls after flagging federal contract

cancellations

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Darden Restaurants ( DRI ) narrows annual profit forecast

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Indexes off: Dow 0.35%, S&P 500 0.29%, Nasdaq 0.24%

(Updates for market open)

By Pranav Kashyap and Johann M Cherian

March 20 (Reuters) -

U.S. stock indexes dropped on Thursday, as worries about the

repercussions of an ongoing global trade war resurfaced, a day

after the Federal Reserve left interest rate steady but warned

of an uncertain economic backdrop.

Global markets have been roiled with volatility over the

past few weeks as investors were concerned that President Donald

Trump's aggressive stance on trade policies could stoke

inflation, tip the economy into a recession and disrupt the

Fed's monetary policy easing cycle.

The Fed maintained current interest rates on Wednesday as

expected and reaffirmed its forecast for two 25 basis point

reductions by the year-end.

However, adding to markets' unease, the central bank also

projected slightly reduced growth and increased inflation for

the year, alongside a modest uptick in the unemployment rate by

2025.

All the three major stock indexes closed higher by over 1%

each in the previous session. However, the S&P 500 is down 3.5%

so far this year and the Nasdaq is lower by 8%. The indexes'

declines have erased all gains since Trump's November election.

"We got a slightly excited on Wednesday by the dovish tone

that came out the press conference (of Fed Chair Jerome

Powell)," said Lilian Chovin, head of asset allocation at

Coutts.

"This is not the best environment for investors to take

a lot of risk. We should expect markets to remain choppy until

things quiet down and we have more clarity on Trump's policies,"

Chovin added.

A key focus for the markets will be the upcoming

implementation of new reciprocal and sectoral tariffs, slated to

take effect in early April.

Market participants are currently factoring in 63 basis

points of easing from the Fed this year, placing odds of 25 bps

rate cut in June at 60%, according to CME Group's Fedwatch tool.

Data showed initial jobless claims were largely in line

with estimates in the week prior.

A gauge of manufacturing activity in the U.S.

mid-Atlantic region rose more than expected in March. However,

the data also suggested increasing price pressures.

At 09:43 a.m. ET the Dow Jones Industrial Average

fell 142.20 points, or 0.35%, to 41,816.93, the S&P 500

lost 16.45 points, or 0.29%, to 5,658.84 and the Nasdaq

Composite lost 43.42 points, or 0.24%, to 17,707.37.

Ten of the 11 S&P 500 sectors declined with industrials

leading with a 0.7% drop.

The CBOE volatility index, also known as Wall

Street's fear gauge, gained 0.53 points and was last at 20.37.

Darden Restaurants ( DRI ) reversed premarket losses and was

last up 5.5%. The Olive Garden ( DRI ) owner narrowed its annual profit

forecasts, making it the latest among a slew of companies to

issue cautious forecasts as a consequence of tariff uncertainty.

Accenture ( ACN ) fell 9.7% after the consultancy firm said

the Trump administration's efforts to reduce federal spending

have led to delays and cancellations of new contracts.

Growth stocks were mixed, with Meta and Nvidia ( NVDA )

up over 1.2% each, while Amazon.com ( AMZN ) and

Microsoft ( MSFT ) were down marginally.

Tesla lost 1.1%. The automaker

recalled

over 46,000 Cybertruck vehicles in the United States.

Declining issues outnumbered advancers by a 2.58-to-1 ratio

on the NYSE and by a 2.05-to-1 ratio on the Nasdaq.

The S&P 500 posted two new 52-week highs and no new

lows, while the Nasdaq Composite recorded 10 new highs and 38

new lows.