US stocks were mostly lower yesteday, continuing a recent bout of volatility as the dollar resumed its upward trend while the euro fell sharply.

Yesterday’s activity represented a retreat from the previous session's heavy move into riskier assets such as stocks and oil brought on by comments from the Federal Reserve, which struck a more dovish tone than investors had anticipated.

The dollar yesterday rebounded from its biggest one-day fall against the euro and sterling in six years.

The euro fell more than two per cent on the day, continuing a downward slope that has seen the currency tumble more than 20 per cent against the dollar since mid-2014.

The US central bank on Wednesday indicated it preferred a more gradual path to normalizing benchmark interest rates, slashing rate projections over the next few years and lowering its outlook on the US economy.

Omar Aguilar, chief investment officer of equities for Charles Schwab Investment Management in San Francisco, said the reaction to the comments was “not the kind of market that’s going to prevail, so it makes sense that pretty much everything we're seeing today is just a reversal of yesterday's move”.

The US dollar index, which measures the greenback against a basket of major currencies, rose 0.8 per cent. The dollar rose 0.71 per cent to 120.94 yen

The euro fell 2.1 per cent to $1.0645, extending its year-to-date decline to 12 per cent. Further weakness could come with the European Central Bank just starting its bond-buying program and Greek debt negotiations still unresolved; Aguilar said the odds were “pretty high' that the currency would fall under parity with the dollar.

The Dow Jones industrial average fell 103.78 points, or 0.57 per cent, to 17,972.41, the S&P 500 lost 9.96 points, or 0.47 per cent, to 2,089.54 and the Nasdaq Composite added 7.79 points, or 0.16 per cent, to 4,990.62. (Reuters)

The Nasdaq was supported by strength in large-cap biotech stocks. Regeneron Pharma rose 2.5 per cent to $483.90 while Biogen Idec rose 2.4 per cent to $438.35.

In Europe, the FTSEurofirst 300 index of top regional shares closed 0.46 per cent higher at its highest since 2007.

MSCI's all-country world index, a measure of equity performance in 46 countries, was flat on the day, paring earlier gains of nearly 0.9 per cent.

Benchmark 10-year US Treasury yields edged lower after the Fed cut its inflation outlook for 2015 following its latest two-day policy meeting.

Ten-year Treasury notes were last down 9/32 in price to yield 1.9807 per cent.

Brent crude oil fell back towards $54 a barrel after Kuwait said the Organization of Petroleum Exporting Countries had no choice but to keep production steady, refocusing the market on global oversupply.

Brent for May delivery fell 3.3 per cent to $54.08 a barrel. US crude for April delivery fell 3.3 per cent to $43.19. Both had rallied sharply on Wednesday following the Fed's comments, with Brent up nearly 4.5 per cent.

Gold rose 0.1 per cent on the day while silver jumped 1.4 per cent and copper climbed 3.2 per cent.