* Fed keeps rates unchanged, on track to raise rates in June
* Apple shares rise, day after results (Recasts with U.S. stocks fall; updates U.S. markets closing levels)
By Caroline Valetkevitch
NEW YORK, May 2 (Reuters) - U.S. stocks fell on Wednesday as investors digested a statement from the Federal Reserve, which left interest rates steady and said inflation had "moved close" to its target, while the dollar climbed late against a basket of currencies.
Stocks, which initially gained after the Fed statement, reversed course as potential U.S. restrictions on Chinese telecommunications companies reinforced investor concerns about trade relations between the United States and China.
In its statement, the Fed expressed confidence that a recent rise in inflation to near the U.S. central bank's target would be sustained, leaving it on track to raise borrowing costs in June. It also said inflation "on a 12-month basis is expected to run near the Committee's symmetric 2 percent objective over the medium term."
"There wasn't any particular news to get it going other than the Fed staying the course, and that contributed to the slide in stock prices," said Robert Pavlik, chief investment strategist, senior portfolio manager at SlateStone Wealth LLC in New York.
The Fed raised rates in March and currently forecasts another two increases this year. Ahead of the statement, some investors were nervous it might sound more hawkish on policy tightening after recent concerns about rising inflation.
The U.S. dollar fell from 2018 highs set earlier in the day after the Fed statement raised concerns that monetary accommodation will stay loose even as the central bank hikes rates. But the greenback later reversed course to trade higher.
The dollar index rose 0.3 percent, with the euro up 0.02 percent to $1.1952.
On Wall Street, the Dow Jones Industrial Average fell 174.07 points, or 0.72 percent, to 23,924.98, the S&P 500 lost 19.13 points, or 0.72 percent, to 2,635.67 and the Nasdaq Composite dropped 29.81 points, or 0.42 percent, to 7,100.90.
U.S. President Donald Trump is considering issuing an executive order restricting certain Chinese companies from selling telecommunications equipment in the United States.
Trade relations between the United States and China have already been strained as Trump has weighed imposing tariffs on up to $150 billion of Chinese imports. A Trump administration delegation is scheduled to visit Beijing on Thursday and Friday for talks with top Chinese officials.
"It's hard to see investors willing to take increasing risk ahead of a couple more weeks of trade discussions and negotiations to come," said Matthew Miskin, market strategist at John Hancock Investments in Boston.
Forecast-beating results from the world's biggest company, Apple Inc, lifted tech shares, limiting losses in the S&P 500. Apple shares were up 4.4 percent.
Apple beat profit and revenue expectations in the first quarter, thanks to robust iPhone sales, and it announced a $100 billion share buy-back.
MSCI's gauge of stocks across the globe shed 0.39 percent.
U.S. Treasury yields for most maturities fell as a quarterly refunding program that aims to finance the country's massive fiscal deficit came in short of expectations.
Treasury yields had risen overnight in the run-up to the refunding announcement.
U.S. 10-year yields were at 2.970 percent, down from 2.976 percent late on Tuesday.
In the oil market, U.S. crude rose 68 cents to settle at $67.93 a barrel, while Brent gained 23 cents to settle at $73.36.
Additional reporting by Gertrude Chavez-Dreyfuss, Richard Leong, April Joyner and Karen Brettell in New York, Sujata Rao, Helen Reid and Dhara Ranasinghe in London; editing by Nick Zieminski and Dan Grebler