The S&P/TSX composite index was off 46.18 points to 11,618.53 and the TSX Venture Exchange gained 6.25 points to 1,189.33.
The Canadian dollar was down 0.23 of a cent to 99.48 cents US, as the greenback moved higher after the Fed announcement.
On Wall Street, the Dow Jones industrial average was down 32.55 points to 12,976.13 and the Nasdaq slid 19.31 points at 2,920.21. The S&P fell four points to 1,375.32.
The Fed's statement to take no action noted that economic growth decelerated in the first half of the year. It also said employment growth has been slow in the U.S., while household spending has been rising at a slower pace than earlier in the year.
Policymakers repeated their plan to hold short-term interest rates at record low levels until at least late 2014.
A note from CIBC economist Avery Shenfeld said the Fed's statement repeats what the markets have already known, that the U.S. economy has faced lacklustre growth.
"In sum, nothing new here, which is what we expected so early in its current term extension program, and we lean slightly towards December rather than September for the adoption of a third round of quantitative easing," Shenfeld wrote.
The European Central Bank meets Thursday, and expectations have been high. Last week, ECB president Mario Draghi said the bank "is ready to do what it takes to preserve the euro," which set off speculation about significant moves, though that optimism has since lost much of its steam.
Gold stocks were lower on the TSX, off 1.5 per cent, as August gold closed down $6.80 to US$1,603.70 an ounce on the New York Mercantile Exchange before the Fed announcement. September copper moved down 4.3 cents to US$3.38 a pound.
Mining and metals stocks dropped 1.4 per cent with Ivanhoe Mines (TSX:IVN) down 27 cents to $8.18.
The TSX energy sector gained 0.4 per cent as the September crude contract on the Nymex closed 85 cents higher to US$88.91 a barrel.
The latest U.S. data showed that manufacturing shrank for the second straight month in July. The Institute for Supply Management, a trade group of purchasing managers, said its index of manufacturing activity ticked up to 49.8, from 49.7 in June, further evidence of an economy growing at a sluggish pace
Payroll provider ADP said U.S. businesses added 163,000 jobs last month. The report comes two days before the U.S. government reports jobs numbers for July.
U.S. traders experienced unusually sharp moves in a number of stocks shortly after the opening bell after a technical glitch at a major processor affected a number of stocks. The glitch occurred at Knight Capital, one of the largest processors of stock trades. The company said in a statement that a "technology issue" had occurred in its market-making unit related to the routing of shares of about 150 stocks to the New York Stock Exchange.
In corporate developments, WestJet Airlines Ltd. (TSX:WJA) says it will hike its quarterly dividend to shareholders by 33 per cent after second-quarter profits hit a record $42.5 million or 31 cents per share. Revenue was up 12.2 per cent to $809.3 million. Shares dropped 59 cents, to $15.99.
Talisman Energy (TSX:TLM) reported a sharp fall in its second-quarter profit and revenue due to weaker commodity prices and higher operating costs. The Calgary-based company posted net income of US$196 million, or 19 cents per share, from $698 million, or 68 cents per share. Revenue declined to $1.87 billion from $2.23 billion. Company shares were up more than seven per cent, or 91 cents, to $13.31.
Maple Leaf Foods Inc. (TSX:MFI) reported profits rose to $32.5 million in the second quarter, up 32 per cent from a year ago. Total sales from Maple Leaf's four business groups edged up to $1.26 billion from $1.24 billion. The company also said it expects to face higher prices for ingredients in the coming quarters, as it grapples with rising commodity prices. Its shares rose seven per cent, or 72 cents, to $10.72.
Torstar Corp. (TSX:TS.B) earned $35.7 million or 45 cents per share in the second quarter, from $112.7 million or $1.42 per share a year earlier, though that included $74.6 million or 94 cents per share from the sale of Torstar's investment in CTV Inc. Shares were down 50 cents to $8.60.
The hostile takeover proposal for Rona Inc. (TSX:RON) has been given support from one of the company's biggest shareholders. Invesco Canada confirms it is backing U.S.-based Lowe's $1.76-billion bid for Canada's largest home-improvement retailer. The company's shares gained 10 cents to $13.60.