The Dow and S&P 500 have ended a choppy session lower after the US Federal Reserve reassured investors of its support for the economy but projected a 6.5 per cent decline in gross domestic product this year.

The Nasdaq, helped by gains in Microsoft and Apple , managed to hold onto a good chunk of its gains and registered a closing record high for a third straight session.

In its latest policy statement, the Fed also forecast a 9.3 per cent unemployment rate at year’s end, and officials expected the key overnight interest rate, or federal funds rate, to remain near zero through at least 2022.

The S&P 500 and Dow both moved between gains and losses after the statement, which included the Fed’s first projections on the economy since the coronavirus outbreak, and following comments from Fed Chairman Jerome Powell.

“The projections for GDP and for unemployment are that it’s going to improve slowly from here, but it still takes a while to get back,” said Tom Martin, senior portfolio manager at Globalt in Atlanta.

An S&P index of bank shares, which tend to benefit from rising rates, fell 5.8 per cent in its biggest daily percentage decline since April 15, and the S&P 500 financial index was the biggest drag on the benchmark index.

The Dow Jones Industrial Average fell 282.31 points, or 1.04 per cent, to 26,989.99, the S&P 500 lost 17.04 points, or 0.53 per cent, to 3,190.14 and the Nasdaq Composite added 66.59 points, or 0.67 per cent, to 10,020.35. The S&P 500 was off as much as 0.8 per cent before the Fed statement.

The Fed’s pledge to keep monetary policy loose until the US economy is back on track repeats a promise made early in the central bank’s response to the coronavirus pandemic.

“I noticed a material downward move in the banks as (Powell) talked about yield curve control. That is not something the banks want to see. What it does is it keeps rates down,” said Quincy Krosby, chief market strategist at Prudential Financial in Newark, New Jersey.

Shares of Eli Lilly and Co rose late, ending up 1.3 per cent, after its chief scientist told Reuters that it could have a drug specifically designed to treat COVID-19 authorised for use as early as September if all goes well with either of two antibody therapies it is testing.

Declining issues outnumbered advancing ones on the NYSE by a 2.25-to-1 ratio; on Nasdaq, a 1.86-to-1 ratio favoured decliners.

The S&P 500 posted 17 new 52-week highs and no new lows; the Nasdaq Composite recorded 92 new highs and three new lows.

Volume on US exchanges was 14.13 billion shares, compared to the 12.69 billion average for the full session over the last 20 trading days.