Dow falls for a second day following Fed policy update, loses 210 points

The Dow Jones Industrial Average fell for a second day as investors digested the Federal Reserve's latest policy update, in which it moved up its timeline for interest rate hikes and forecast higher inflation.

Materials-related stocks led the losses as the Fed's move to eventually raise rates, along with a current campaign by China to tamp down the price of metals, took the air out of a surge in commodity prices this year.

Losses in the overall market were tame, however, and the S&P 500 was less than 0.9% below an all-time high. The central bank maintained its asset-buying program, which some investors argued would support equities some more in the short term.

The Dow Jones Industrial Average dropped 210 points, or 0.62%, to 33,823.45, weighed down by losses of more than 3% in Dow Inc. and Caterpillar each as most commodity prices took a hit. The S&P 500 fell 0.04% to 4,221.86. The Nasdaq Composite gained 0.87% to 14,161.35 as investors huddled in some Big Tech stocks with Tesla up 1.9%, Amazon up nearly 2.2% and Facebook up 1.6%. Shopify and Twilio gained close to 6.1% and 8%, respectively.

The closely-watched Federal Reserve meeting Wednesday spurred a sell-off in equities after the central bank moved up its timeline for rate hikes, seeing two increases in 2023. The central bank also hiked its inflation forecast to 3.4% for the year, a percentage point higher than the Federal Open Market Committee's forecast in March.

Copper futures were off by nearly 5%, while futures prices for palladium and platinum fell more than 11% and nearly 7%, respectively. U.S. oil prices settled down more than 1% to $71.04.

"Commodities have been a popular investment in the last year as investors have been adding some portfolio protection against inflation. So many investors were probably overexposed going into the Fed meeting and the U.S. dollar's response is forcing some reconsideration," Jim Paulsen, chief investment strategist at the Leuthold Group, told CNBC.

Hedge fund legend David Tepper told CNBC's Scott Wapner that the Fed did a good job on Wednesday and that "the stock market is still fine for now."

Adding to the bearish sentiment on Thursday, the Labor Department reported that initial jobless claims rose last week to 412,000, up from the previous week's 375,000. Economists polled by Dow Jones expected jobless claims of 360,000.