LONDON (AP) — Stock markets tumbled Friday, particularly in Europe, as investors were left in limbo following the Federal Reserve's decision to keep U.S. interest rates unchanged at a record low.
Though the Fed had not been expected to raise interest rates for the first time in more than nine years, investors appeared worried by the lack of guidance from the central bank and its concern about the global economy.
In its accompanying policy statement, the Fed revealed worries that "recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near-term".
Though Fed Chair Janet Yellen said a rate hike this year is possible, much depends on incoming economic data — and that only adds to the uncertainty for investors.
"For the markets, it means more months of uncertainty, which investors do not like," said Craig Erlam, senior market analyst at OANDA.
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In Europe, Germany's DAX was down 2.9 percent at 9,935 while the CAC-40 in France fell 2.6 percent at 4,533. The FTSE 100 index of leading British shares was 1.4 percent lower at 6,098.
Wall Street was poised for sizeable losses at the bell — Dow futures and the broader S&P 500 futures were both down 1.1 percent.
Expectations for U.S. interest rates are likely to continue to drive stock markets and the dollar in the final months of the year. On Friday, the dollar steadied against the euro after falling in the wake of the decision — the euro was down 0.2 percent at $1.1418. The U.S. currency, meanwhile, remained weak against the Japanese yen, trading 0.5 percent lower at 119.42 yen.
"The delay in monetary policy tightening by the Fed creates potential for a subdued dollar performance in the near term," said Nick Bennenbroek, head of currency strategy at Wells Fargo Bank.
The dollar's decline against the yen hit Japanese stocks hard. The country's main stock index, the Nikkei 225, slipped nearly 2 percent to 18,070.21, as traders fretted about the potential impact on Japanese exports stemming from the yen's appreciation.
Elsewhere in Asia, sentiment held up better. South Korea's Kospi added 1 percent to 1,995.95 while Hong Kong's Hang Seng was up 0.3 percent to 21,924.39. The Shanghai Composite Index rose 0.4 percent to 3,097.92.
The Fed decision to keep rates on hold hit oil markets too especially as it was largely based on concerns about the global economy. The benchmark U.S. rate was down $1.38 at $45.52 a barrel while Brent crude, the main contract for international oils, rose 68 cents at $48.40.