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Dow futures fall more than 200 as Street digests Fed decision

A trader works on the floor of the New York Stock Exchange.
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U.S. stock index futures indicated a lower open on Friday as traders reacted to yesterday's decision from the Federal Reserve to hold off rising rates.

While markets had given low odds to a rate rise, about half of Wall Street's economists and strategists were expecting a hike in the cost of borrowing.

Dow futures were off more than 250 points, while S&P 500 and Nasdaq futures both implied an open of 1 percent lower.

London's FTSE 100 plunged 2 percent from its opening price Friday only to quickly recoup losses in what traders are calling a "fat finger" error.

Markets go into Friday with a new view of the Fed's path to higher rates, and the promise of super-low rates for a little while longer.

Odds have also risen that the Fed will now not hike rates until 2016, and RBS says the markets are currently pricing the first full rate rise for March but odds for December were still above 60 percent.

Fed Chair Janet Yellen commented in a briefing that, "In light of the heightened uncertainties abroad and the slightly softer expected path for inflation, the committee judged it appropriate to wait for more evidence, including some further improvement in the labor market, to bolster its confidence that inflation will rise to 2 percent in the medium term."

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Friday will see quadruple witching – associated with increased volumes and volatility – take place, with the expiration of three related classes of options and futures contracts, as well as individual stock futures options.

In Europe, the pan-European Stoxx 600 index was around 1.5 percent lower as investors digested the Fed's decision. In Asia, the Shanghai Composite index closed up 0.42 percent, while Japan's Nikkei finished 1.96 percent lower.

In oil markets, Brent crude traded below $49 a barrel, down about 1.5 percent, while U.S. crude was nearly 3 percent lower near $45.50 a barrel.

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No significant earnings are expected today. On the data front, leading indicators are expected at 10 a.m. ET.

--CNBC's Patti Domm contributed to this report.