(Updates after Wall Street close, adds graphic links))
* U.S. Fed's growth warning hits European, U.S. stocks
* Gains in emerging market currencies, stocks fizzle
* Bond yields slip on delay in U.S. rate hike to 2016
* Oil prices tumble, gold approaches near 3-week peak
By David Gaffen and Richard Leong
NEW YORK, Sept 18 (Reuters) - Stocks on major markets slipped on Friday and bond prices rose, pushing yields sharply lower, after the U.S. Federal Reserve on Thursday clung to its near-zero interest rate policy with global economic growth slowing.
Stocks and currencies in emerging markets, which are more vulnerable to higher U.S. interest rates, briefly welcomed the Fed's decision to postpone an interest rate rise, but their bounce faded with the persistent sell-off in developed markets.
Short-term lending rates, used as proxies for market expectations for the Fed's next move, shifted dramatically. December's fed funds futures contract rose to drop its rate to 21.5 basis points, implying only about a 44 percent chance of a rate increase by the end of the year.
"Investors are wrestling with how concerned they should be regarding global growth," said Jeremy Zirin, chief equity strategist at UBS Wealth Management in New York.
"The Fed has introduced a quasi-third mandate on global growth, apart from the labor market and inflation."
U.S. debt yields remained under downward pressure, with the U.S. Treasury two-year note's yield at 0.678 percent, a day after it hit a four-and-a-half-year high of 0.819 percent.
U.S. stock prices weakened, following other developed markets. The Dow Jones industrial average .DJI ended down 1.74 percent at 16,384.79, while the S&P 500 .SPX finished down 1.61 percent at 1,958.08 and the Nasdaq Composite .IXIC closed 1.36 percent lower at 4,827.23.
The FTSEuroFirst index of the top 300 European shares closed 1.9 percent lower at 1,397.57 points .FTEU3 , its biggest fall in two weeks. .EU
Japan's Nikkei average .N225 fell 2.0 percent.
European government bond yields tumbled, tracking the 2-year U.S. Treasury yield's biggest fall since 2010. The 10-year German Bund yield was down 12 basis points EU10YT=RR to 66 basis points for its biggest one-day fall since early July.
YEAR-END U.S. INTEREST RATE RISE?
A growing number of economists are now wondering whether the Fed will raise interest rates at all this year. A Reuters poll of the primary dealers in Treasury securities showed 12 of 17 now see the first rate increase in December.
Fed Chair Janet Yellen said the global economic outlook appeared less certain, adding that recent falls in U.S. stock prices and a rise in the value of the U.S. dollar were already tightening U.S. financial market conditions.
Emerging market equities touched a one-month high before erasing their gains in late trading. MSCI's broadest emerging market index .MSCIEF was down 0.1 percent, shaving its weekly gain to 3.0 percent which was still its biggest weekly increase since early April.
The U.S. dollar recovered much of Thursday's loss following the Fed's decision. The dollar index against a basket of major currencies .DXY was up 0.7 percent at 95.239.
The euro EUR= gave up earlier gains, falling from a three-week high of $1.1459 earlier to $1.1298, down 1.2 percent. The dollar was little changed against the yen to 119.94 yen JPY= .
U.S. crude oil utures CLc1 settled down 4.7 percent at $44.68 per barrel. Brent crude fell 3.3 percent to $47.47 a barrel LCOc1 .
Gold rose to a near three-week high. Spot gold XAU= rose $7.16 or 0.63 percent, to $1,138.36 an ounce, after earlier hitting $1,141.30.