The Fed Wednesday lifted benchmark interest rates, signaled one more hike was expected later in 2017 and said it would begin this year to reduce the size of its investment holdings.

Fed Chair Janet Yellen gave an upbeat appraisal of the economy, but Briefing.com analyst Patrick O'Hare noted that US inflation lags the Fed's target and said the market's reaction reflected a "festering concern that the Fed might tighten too much, too soon, and choke off the economic recovery effort."

About 15 minutes into trading, the Dow Jones Industrial Average stood at 21,323.27, down 0.2 percent.

The broad-based S&P 500 dropped 0.6 percent to 2,423.64, while the tech-rich Nasdaq Composite Index dropped 1.0 percent to 6,130.79.

Equity markets in Frankfurt, Paris and London were all down more than one percent.

Technology shares were under pressure, with Google parent Alphabet, Expedia, Microsoft and Tesla Motors all falling more than one percent.

Mattel slumped 6.8 percent, falling for a second straight session after the company unveiled a turnaround strategy that included a big cut to the dividend to finance technology investment initiatives.