US stocks ended mixed as worries about the US-China trade dispute offset news that the US central bank does not plan any interest rate rises this year.
The Federal Reserve said it will not raise rates in 2019 because economic growth in North America has slowed down.
The central bank abandoned plans for any rate increases this year, keeping the federal funds rate at 2.25 to 2.50 per cent.
It currently plans one rate rise next year with the benchmark rate predicted to increase to 2.6 per cent in 2020.
The Fed also downgraded its economic forecasts, predicting that unemployment would rise slightly this year and inflation and economic growth would weaken.
It expects the US economy to expand by 2.1 per cent this year, down from its previous forecast of 2.3 per cent.
The unemployment rate forecast was increased to 3.7 per cent for 2019 up from 3.5 per cent in December.
Federal Reserve chairman Jerome Powell repeated his promise to be patient on rate rises.
"It may be some time before the outlook for jobs and inflation calls clearly for a change in policy," Mr Powell said at a press conference at the end of the Fed's two-day policy meeting.
"'Patient' means that we see no need to rush to judgment."
Mr Powell said the outlook for the US economy was positive, however he said economic risks were rising, including Britain's exit from the European Union and the US-China trade dispute.
The US central bank raised US interest rates seven times over 2017 and 2018.
The Fed also said it would ease back on its sell-off of its bond holdings by lowering its monthly cap from $US30 billion to $US15 billion.
It plans to end the reduction in its assets by the end of September.
The S&P 500 and the Nasdaq rallied on the news from the Fed but ran out of steam in late trade.
Earlier, the US President dampened hopes of a quick end to the trade dispute between the US and China.
Donald Trump said tariffs will remain on Chinese imports until he is sure China is complying with any trade deal.
He told reporters that tariffs will be in place for a substantial period of time to make sure that quote China lives by the deal.
The comments and the Fed's about-face on monetary policy saw the greenback lose ground, with some traders betting on a rate cut rather than a rate rise next year.
That boosted the Australian dollar and gold prices.
European stocks fell on negative company news.
Chemical maker Bayer slumped 9.6 per cent after it lost the first round of a US trial over allegations its weed killer Roundup causes cancer.
The British pound fell on the news that UK prime minister Theresa May will ask the European Union for only a short extension for Brexit to June 30th from the end of March.
Iron ore prices dropped 1.4 per cent to $US85.11 a tonne after a court in Brazil ruled that big miner Vale should be allowed to restart its Brucutu iron ore mine which was closed after a deadly dam disaster in January.
Coming up today, Australia's latest unemployment figures are out.
Economists surveyed by Reuters expect the jobless rate to remain steady at 5 per cent in February and for 14,000 jobs to have been created.