Major averages have been on a rollercoaster ride all week amid anxiety over the Fed meeting. Stocks took a sharp nosedive Thursday, with the Dow and the S&P 500 posting their worst losses of 2013.
"There appears to be relative calm following a calamitous period since the Fed threatened to take away the steroids. In the grand scheme of things, stocks still look relatively cheap when compared to cash and government bonds, so investors will be on a bargain hunt following yesterday's battering," said Mike McCudden, head of derivatives at stockbroker Interactive Investor.
(Read More: Stock Drop an Overreaction: Morgan Stanley CEO)
The benchmark 10-year Treasury notes fell, pushing their yield to a near two-year high of 2.516 percent. The Treasury is scheduled to auction $99 billion in new coupon-bearing notes, including $35 billion in two-year notes on Tuesday, $35 billion in five-year notes on Wednesday and $29 billion in seven-year notes on Thursday.
"All the concern in the markets is because the Fed sees the economy stronger in the future," said widely-followed hedge fund manager David Tepper, founder of Appaloosa Management in a statement to CNBC. "In fact, their forecast shows that they will wait until a lower unemployment rate(closer to 6 percent than 6.5 than) to raise interest rates. So they are a bit easier on that front...I obviously thought they should start to taper. [But] the bottom line when the dust settles [is that the] only one place to be [is] STOCKS."
St. Louis Federal Reserve President James Bullard said the decision by the central bank to lay out its plans to taper its bond-buying program was badly timed and that the Fed should have waited for "more tangible signs" of economic improvement and a halt in the downward direction for inflation.
Asian shares stabilized Friday, led by a stellar rebound in Japan's benchmark Nikkei index, which crossed the 13,000 level to rally as much as 2 percent, notching up gains of over 4 percent on the week. Meanwhile, Europe shares closed at their lowest level since January.