The Dow Jones Industrial Average and S&P 500 closed lower on Wednesday after the Federal Reserve's latest monetary-policy announcement dragged Treasury yields lower, pushing bank shares down.

Goldman Sachs led the 30-stock Dow to end the day down 141.71 points at 25,745.67. The closed 0.3 percent lower at 2,824.23. The Nasdaq Composite eked out a gain, closing 0.1 percent higher at 7,728.97.

The Fed forecast no rate hikes in 2019, and that is down from two hikes forecast earlier. The central bank also indicated it intends to end the reduction of its massive $4.2 trillion balance sheet by September. However, the Fed also trimmed its economic growth forecast for 2019.

Stocks initially rallied off their lows of the day on the announcement as traders cheered a more accommodative policy stance from the Fed, which is typically supportive of equity prices.

"Expectations were to remove one dot from the dot plot and to have some description of when the balance sheet run-off would conclude," said Art Hogan, chief market strategist at National Securities. "This actually exceeds expectations."

However, the Fed's announcement also dragged down yields, which in turn knocked bank stocks lower. The benchmark 10-year rate falling to its lowest level in a year to trade at 2.532 percent. The 2-year yield also dropped to 2.4 percent.

Bank stocks fell broadly along with rates. The SPDR S&P Bank ETF (KBE) dropped 3.2 percent. Goldman Sachs declined 3.4 percent while Bank of America, Morgan Stanley, J.P. Morgan Chase and Citigroup all fell at least 2 percent.

"The market might be pricing in more than a cut through next year," said Mike Collins, senior portfolio manager at PGIM Fixed Income. "It feels like they're done."

However, "it's really a tricky spot. If things slow too much and the Fed starts cutting, that's actually not a great environment for equities or corporate earnings or credit risk," Collins said. "It can become a self-fulfilling prophecy, for sure."