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Japan's benchmark Nikkei 225 shed 0.2% to in morning trading to 27,400.37. Australia's S&P/ASX 200 slipped 0.6% to 6,976.40. South Korea's Kospi was little changed, inching down less than 0.1% to 2,416.57. Hong Kong's Hang Seng gained 0.9% to 19,774.42, while the Shanghai Composite gave up less than 0.1% to 3,265.26.

"A risk-off tone following the recent Fed meeting has set the stage for the Asian region to follow through with some losses,� Yeap Jun Rong, a market analyst at IG, said in a commentary.

On Wall Street, the S&P 500 fell 1.6% for its first drop in three days. It closed at 3,936.97. The Dow Jones Industrial Average lost 1.6% to 32,030.11, while the Nasdaq composite dropped 1.6% to 11,669.96.

Some of the sharpest drops came again from the banking industry after Treasury Secretary Janet Yellen said she's not considering blanket protection for all depositors at all banks, unless they present a risk to the overall system.

The Fed's move was exactly what Wall Street was expecting. The bigger question was where the Fed is heading next. There, the Fed gave a hint it may not hike rates much more as it assesses the fallout from the .

Instead of repeating its statement that “ongoing increases will be appropriate,� the Fed said Wednesday that it now only sees “some additional policy firming may be appropriate.� Chair Jerome Powell emphasized the shift to �may" from “will.�

The Fed also released the latest set of projections from its policy makers on where rates are heading in upcoming years. The median forecast had the federal funds rate sitting at 5.1% at the end of this year, up only a smidge from where it currently sits, in a range of 4.75% to 5%.

The yield on the two-year Treasury, which tends to track expectations for the Fed, tumbled to 3.46% from 4.13% just before the projections were released. It was above 5% earlier this month.

Powell said Wednesday the Fed is still focused on getting inflation down to its 2% goal and is not envisioning any rate cuts this year. He also said the Fed could begin raising rates again if high inflation makes that necessary.

Economic “indicators are still pretty resilient,� said Sameer Samana, senior global market strategist for Wells Fargo Investment Institute. “For markets to still speculate on rate cuts, it’s probably not going to take place this year if the Fed has its way.�

The Fed was stuck with a difficult decision as it balanced whether to keep or ease off the increases given the pain felt by banks. The second- and third-largest U.S. bank failures in history have both occurred in the last two weeks.

A worry is that too much pressure on the banking system, particularly among the smaller and mid-sized banks at the center of investors’ crosshairs, would mean fewer loans made to businesses across the country. That in turn could mean less hiring and less economic activity, pushing the risk of recession still higher.

In energy trading, benchmark U.S. crude fell 83 cents to $70.07 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard lost 73 cents to $75.96 a barrel.

In currency trading, the U.S. dollar fell to 130.58 Japanese yen from 131.39 yen. The euro cost $1.0899, up from $1.0857.

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AP Business Writer Stan Choe contributed.