U.S. stocks dipped Wednesday after the Federal Reserve raised interest rates 0.5% and indicated that more hikes are likely to stifle inflation.

The Dow Jones Industrial Average fell 142.95 points, or 0.42%, to close at 33,965.69. The S&P 500 slumped 24.44 points, or 0.61%, to close at 3,995.21, and the Nasdaq Composite Index dipped 85.93 points, or 0.76%, to close at 11,256.81.

Fed Chairman Jerome Powell said recently released economic data showed inflation cooling, including declining rates of price increases for goods and services. But he said that the central bank would need more evidence of a slow down before it stopped aggressively raising interest rates.

"The inflation data received so far for October and November show a welcome reduction in the monthly pace of price increases," Powell said. "But it will take substantially more evidence to give confidence that inflation is on a sustained downward path."

The 0.5% hike was widely expected and a downward departure from three consecutive increases of 0.75%.

Some stocks that fell Wednesday included Tesla (TSLA), which closed at $156.80, down $4.15, or 2.58%. Apple's (AAPL) price of shares fell $2.26, or 1.55%, to close at $143.21.

"2023 is the year when you will start to see the impact of all these rate increases," Seema Shah, chief global strategist at Principal Asset Management, told the Wall Street Journal. "You can see strains are certainly building up, but the actual economic numbers are pretty resilient. We don't think that will last."