S&P falls as Fed hints at hawkish tightening timeline

The Dow surrendered its nearly 500 point gain late in the session Wednesday, nosediving along with the S&P to finish lower. Stocks initially surged after the Federal Reserve said it's keeping key interest rates at zero for now.

But the hefty gains soon evaporated as the Fed signaled it'll soon raise interest rates to combat inflation.

Spartan Capital Securities Chief Market Economist Peter Cardillo says, however, the Fed should've acted sooner.

"It was late. There's no question about that. They were behind the curve, and that's why all of a sudden they're somewhat hawkish. But can it be dealt with? Yes."

The Dow declined 130 points, or four-tenth percent. The S&P 500 shed nearly two-tenth percent. But the Nasdaq managed to barely break even ...

... supported by shares of Microsoft, which gained nearly 3%. The software developer issued a bullish forecast for quarterly revenue, driven partly by its cloud business.

Mattel shares jumped over 4%. The toymaker snatched back the right to make toys from Disney's Princess lineup and the "Frozen" franchise... from archrival Hasbro, whose shares dropped sharply.

After the bell, shares of Tesla rose. The world's most valuable automaker delivered a record number of vehicles. Its quarterly revenue surged higher, zipping past analysts' estimates.