In the midst of a Dow Jones Industrial Average tailspin Wednesday, the Federal Reserve said the U.S. economy is seeing steady growth, with consumer spending improving at a “slight to moderate” pace. But the upbeat pronouncement wasn't enough to reverse the day's market dive.

The Fed on Wednesday released its Beige Book, the central bank’s detailed, on-the-ground view of current economic conditions in regions across the country. The report comes after the Dow Jones Industrial Average plunged as much as 450 points earlier in the session as concerns about the global economy continue to weigh on investor sentiment. The CBOE Volatility Index, or the VIX, considered the best gauge of fear in the market, jumped to just under 26 in early trading and then spiked 30 percent. By comparison, the VIX hovered between 10 and 15 in the summer.

“I feel today's action in the markets are just a precursor of things to come,” said Alan Valdes, vice president of trading at DME Securities.

Following the Fed's announcement, the Dow began to cut losses. 

At 2:22 pm EST, the Dow Jones Industrial Average had dropped 334 points, or 2.05 percent, to 15,980.38; the S&P 500 Index fell 40 points, or 2.16 percent, to 1,836.75; the Nasdaq Composite lost 76 points, or 1.81 percent, to 4,151.26.

Another factor adding to the recent volatility could be the Federal Reserve winding down its quantitative easing program this month, bringing an end to the 5-year-old asset purchasing program. The Federal Open Market Committee announced in December 2013 it would begin tapering its monthly purchases of Treasury bonds and mortgage-backed securities beginning in January.

“I’ve been listening to a lot of these talking heads say now is the time to buy on the dips. I disagree,” Valdes said. “I think you want to stay away from the market until the dust settles. You can always get it at another point.”