US stocks waver after Fed officials indicate rate hike possible this year

NEW YORK — The U.S. stock market is wavering Wednesday after several officials at the Federal Reserve indicated they may raise interest rates before the end of the year.

The S&P 500 fell 0.6 percent and erased an earlier, modest gain after the Fed released projections showing policymakers see the federal funds rate ending this year and the next two at higher levels than they had been forecasting a few months ago. Higher interest rates can keep a lid on inflation, but they also slow the economy and hurt prices for investments.

The Dow Jones Industrial Average went from a gain of 281 points before the Fed's announcement to a dip of 86 points, or 0.2 percent, as of 2:25 p.m.

Eastern time. The Nasdaq composite slipped 0.6 percent.

In the bond market, Treasury yields rose after nine of 18 policymakers at the Fed said they are projecting at least one increase to the federal funds rate by the end of this year. One policymaker did not submit a forecast following the first meeting by the Fed since Kevin Warsh took over as chair. The yield on the 10-year Treasury, which influences rates for mort