Stocks head south after Powell's inflation warning

STORY: Wall Street gyrated to ultimately end sharply lower on Wednesday after the U.S. Federal Reserve delivered a 25 basis-point interest rate hike…

with the Dow, S&P 500 and the Nasdaq all closing down roughly 1.6%.

The three major indexes at first climbed higher as Chair Jerome Powell indicated the Fed might pause its rate hikes due to turmoil in the banking sector.

"We no longer state that we anticipate that ongoing rate increases will be appropriate to quell inflation. Instead, we now anticipate that some additional policy firming may be appropriate."

But stocks headed south as deflated investors digested Powell’s subsequent Q&A session, in which he reiterated the central bank's commitment to reining in inflation.

POWELL: "We're very focused on getting inflation down, and because we know in the longer run that that is the thing that will most benefit the people we serve.”

[FLASH]

“I believe this may be the last hike, for good.”

But Jimmy Lee, founder and CEO of The Wealth Consulting Group, believes Wednesday’s rate increase will likely be the Fed’s last.

"My base case is that inflation's coming down... and the stickiest part of, potentially, inflation is the wage pressures - and the signs of wage pressures coming down I think is another reason why the Fed just may stop now."

Meanwhile, shares of beleaguered First Republic Bank slipped more than 15% in volatile trading amid worries it may need to downsize or seek government support.

Among other movers, retail darling GameStop surged 35% after posting a surprise fourth quarter profit.

And Nike dropped nearly 5% a day after the sports apparel maker raised its full-year revenue outlook but warned of margin pressures.