Wall Street fell, while US Treasuries rose, after Federal Reserve policy makers opted to keep interest rates steady but suggested the odds had risen for a December hike.

"The committee judges that the case for an increase in the federal funds rate has continued to strengthen but decided, for the time being, to wait for some further evidence of continued progress toward its objectives," the Federal Open Market Committee said in a statement at the end of its two-day meeting.

Cleveland Fed President Loretta Mester and Kansas City Fed chief Esther George voted against the decision as both preferred to raise the target range for the fed funds rate to 0.5 to 0.75 per cent, from the current 0.25 per cent to 0.5 per cent.

"The Fed is teasing investors by inserting language to suggest they need just a little bit more evidence of progress towards its objectives," Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management in Menomonee Falls, Wisconsin, told Reuters.

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"A few more jobs reports could do it, meaning December is the most likely scenario."

The government is set to release its latest monthly nonfarm payrolls report on Friday.

In 2.18pm trading in New York, the Dow Jones Industrial Average fell 0.4 per cent, while the Nasdaq Composite Index dropped 0.8 per cent. In 2.04pm trading, the Standard & Poor's 500 Index declined 0.6 per cent.

Meanwhile, the US presidential election weighed on investors' minds as recent polls suggested the race between Democratic candidate Hillary Clinton and Republican Donald Trump is a closer call than it had seemed earlier.

"It looked like Clinton was going to win and now that Trump is gaining momentum, it's making people nervous," Neil Massa, senior equity trader at Manulife Asset Management in Boston, told Reuters.

"The fall in crude oil isn't helping matters either."

The Fed is teasing investors by inserting language to suggest they need a little bit more evidence of progress towards its objectives.

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Oil dropped after a US Energy Information Administration report showed crude inventories rose 14.4 million barrels for the week ended October 28, a record weekly increase and far exceeding analysts expectations.

The Dow fell as declines in shares of Pfizer and those of Caterpillar, down 2 per cent and 1.8 per cent respectively, outweighed gains in shares of 3M and those of Home Depot, up 0.8 per cent and 0.6 per cent respectively.

Bucking the trend, Bunge shares climbed after the agricultural trader said it sees "potential for significant earnings growth in 2017", bolstered by a bumper US crop.

"With this year's turnaround in Food & Ingredients, Sugar & Bioenergy and Fertiliser, we see the potential for significant earnings growth in 2017 as Agribusiness returns to historical levels of performance, supported by growing protein demand, record crops in South America, and the fact that Brazilian farmers have only priced small percentages of their next year's soy and corn crops," Drew Burke, chief financial officer, said in a statement.

Bunge shares traded 8.7 per cent higher as of 1.24pm in New York.

In Europe, the Stoxx 600 Index finished the day with a slide of 1.1 per cent from the previous close. The UK's FTSE 100 Index retreated 1 per cent, France's CAC 40 Index slid 1.2 per cent, while Germany's DAX Index dropped 1.5 per cent.