US open: Dow plunges over 280 points amid fears of economic slowdown

US stocks turned sharply lower early on Friday, after the Federal Reserve opted against hiking interest rates amid fear of a global economic slowdown.

Shortly before 1500 BST, the Dow Jones Industrial Average was down 282 points to 16,393.04, while the S&P 500 and the Nasdaq were 22 and 54 points lower respectively.

Fed sits tight

On Thursday night, the US central bank opted to leave interest rates unchanged, although it did not rule out the chance of tightening its fiscal policy later this year.

"Despite the majority of analysts now erring on the side of no rate-hike in 2015, investors appeared to be worried by just how negative the Fed was on Thursday," said Spreadex's financial analyst Connor Campbell.

"Therefore instead of the expected index-boost that should have accompanied the central bank’s decision, investors are instead fretting about the state of the global economy."

Concerns over a global slowdown and China-driven volatility in the Asian markets influenced the highly-anticipated decision, said Fed chairwoman Janet Yellen.

"We still anticipate that rising wage and price inflation next year will eventually force the Fed to tighten policy much more aggressively," said Capital Economics' chief US economist Paul Ashworth.

"The longer the Fed delays now the higher interest rates will eventually have to go. But the way things are going, more of that tightening is going to be back-loaded into the second half of this year."

With the US central bank's day of reckoning now in the past, investors will have very little to analyse in terms of economic data on Friday.

Leading indicators for August, on tap at 1500 BST, are the highlight of the session.

Elsewhere, Asian stock markets closed on a mixed note, after the Fed's decision to keep interest rates unchanged sparked a bout of volatility, while European stocks were firmly in the red.

Gold was the standout winner following the Fed's announcement, gaining 1.92% to $1,138.50, while the dollar declined against the main currencies. The greenback lost 0.54% and 0.39% against the yen and the pound respectively but was broadly flat against the euro.

Oil prices fell, with West Texas Intermediate slumping 3.39% to $45.36 a barrel, while Brent shed 1.74% to $48.24 a barrel.

In company news, Apple slid 0.85% after winning a patent ruling in a case against Samsung, with a federal appeals court ruling the iPad manufacturer was to be granted an injunction barring its rival from using specific phone features that violated Apple’s patents.

Natural resources group Freeport-McMoRan tumbled 9.29% after raising $1bn through selling stocks and unveiling plans to raise further funds.