By Isla Binnie

NEW YORK (Reuters) -Major Wall Street indexes ended a choppy trading session little changed after the U.S. central bank held interest rates steady on Wednesday, while the six-day-old Israel-Iran air war kept oil prices climbing on fears of escalation and supply disruption.

In a much-anticipated address, Federal Reserve Chair Jerome Powell said the Fed expects goods prices for U.S. consumers to go up over the course of the summer under pressure from President Donald Trump's tariffs.

The Fed's update earlier in the day signalled borrowing costs were still likely to fall this year, but that future cuts would proceed a little more slowly.

Powell has insisted the Fed's moves are based on data. He cautioned on Wednesday not to place too much stock in the forecasts, which could change as more readings come in.

"Powell by design left optionality open," said David Seif, chief economist for Developed Markets at Nomura in New York, adding that the chair "was saying we don't know what the impact of the tariffs is going to be. That seems like a fair statement when you've had the largest increase in tariffs that the U.S. has seen in 95 years."

The Dow Jones Industrial Average ended 0.10% lower on the day, the S&P 500 fell 0.03% and the Nasdaq Composite rose 0.13%.

Stocks were solidly higher before the Fed statement.

Geopolitics remained in focus as Iranian Supreme Leader Ayatollah Ali Khamenei rejected Trump's demand for unconditional surrender, and Trump said his patience had run out but did not indicate his next step.

Trump declined to say whether he had made any decision on whether to join Israel's bombing campaign against archenemy Iran. Asked if he thought the Iranian government could fall, Trump said: "Sure, anything could happen."

Brent crude futures settled 25 cents higher at $76.70 a barrel. U.S. West Texas Intermediate crude rose 30 cents to $75.14. Earlier in the session, prices had been down around 2%. On Tuesday, prices jumped over 4%.

U.S. GOVERNMENT DEBT COSTS RISE AFTER POWELL

U.S. Treasury yields pared earlier declines after Powell forecast accelerating inflation.

The yield on benchmark U.S. 10-year notes was 4.391%, the same as its level late on Tuesday.

Concerns the United States will join the Israel-Iran conflict had boosted demand for safe-haven U.S. debt and helped send yields lower earlier on Wednesday.

Those yields surged on April 2 after Trump announced higher-than-expected tariffs, prompting concerns foreign investors would move away from U.S. assets. They stabilised in the ensuing weeks as the president delayed implementing the levies.