Doubts have crept into investors' minds, however, because the central bank thinks the economy isn't strong enough for it to pull back the stimulus. William Dudley, the President of the Fed's New York Branch said Monday that while the economy was improving, "the headwinds" created by the financial crisis were only easing slowly.
"At first blush (the stimulus) looks positive," said Kate Warne, an investment strategist at Edward Jones, a financial advisor. "But at second blush it says conditions weren't as strong as we were previously thinking. Markets are now responding to that."
The Fed is buying $85 billion in bonds each month to hold down long-term interest rates and encourage borrowing and spending.
On Monday, the S&P 500 index dropped 8.07 points, or 0.5 percent, to 1,701.84. The index was fractionally lower than its level before the Fed's statement last Wednesday.
The Dow fell 49.71 points, or 0.3 percent, to 15,401.38 The Nasdaq composite fell 9.44 points, or 0.3 percent, to 3,765.29.
Financial stocks fell the most among the 10 industrial groups in the S&P 500 index. Investors sold on concerns that earnings would be hurt by lower trading volumes of bonds and foreign currencies at investment banks.
Citigroup fell $1.64, or 3.2 percent, to $49.57 after the Financial Times reported that the bank had suffered a "significant decline" in trading revenues that would crimp its earnings.
Goldman Sachs, which began trading on the Dow Monday, also fell. The stock slipped $4.50, or 2.7 percent, to $165.20.
Utilities were the best performing industry group in the S&P 500 index as investors sought less risky places to put their money.
Nike and Visa, along with Goldman, also began trading on the 30-member Dow on Monday, replacing Alcoa, Bank of America and Hewlett-Packard.
The threat of a looming political showdown over the budget also weighed on investors.
The U.S. House of Representatives voted to defund President Barack Obama's health care law on Friday, a gesture that reminded Wall Street that the Republican-led House and the Democratic-controlled Senate are poised for a showdown over spending.
The debt ceiling must be raised by Oct. 1 to avoid a government shutdown, and a potential default on payments, including debt, later in the month.
"There seems to be a higher probability there will be more of a battle over that," said Scott Wren a senior equity strategist at Wells Fargo Advisors. "That could inject some volatility into the market."