US pre-open: Futures lower following Nasdaq's worst session in months

Wall Street futures were in the red ahead of the bell on Wednesday following a mixed first session for the year.

As of 1230 GMT, Dow Jones futures were down 0.28%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.36% and 0.57% weaker, respectively.

The Dow closed 25.50 points higher on Tuesday, while the Nasdaq Composite saw out the session 1.63% lower as it turned its worst daily decline in almost three months.

Wednesday's primary focus will be minutes from the Federal Reserve's December policy meeting, as well as remarks from Richmond Federal Reserve president Tom Barkin that may provide further insight into the rate path ahead before the central bank meets later in January.

Finalto's Neil Wilson said: "FOMC minutes are due this evening: It’s not quite Epiphany but we think this could be when markets maybe 'see the light' a bit with regards the Fed's thinking, the inflation menace and rates.

"The minutes are going to be important since they will colour in the details from the Dec meeting – if you recall this was when Jay Powell went all dovish and tried to kill 'higher for longer'. Remember also this triggered a big rally for risk assets as money markets significantly brought forward expectations for rate cuts in 2024. Therefore, they are important since the market reaction to the meeting and press conference was as big as it was. Stocks are priced for a perfect landing and rate cuts – surely we can’t get both…? The minutes can do a couple of things. One, which seems unlikely due to reasons explained below about the dot plot, is to confirm the dovish pivot in all its glory. The other, more likely in my view, is to confirm that members were maybe not all quite as dovish as Powell sounded at the post-meeting press conference. If you recall it didn't take very long for a senior Fed official to walk back some of what Powell had said."

On the macro front, mortgage applications sank by 10.7% in the week ended 29 December, according to the Mortgage Bankers Association, the fastest weekly decline since February. The fall comes despite lower Treasury yields and mortgage rates, with applications to refinance a mortgage crashing 18.1% and applications to purchase a new home slipping 7.6% to fully erase the 2.4% increase seen a week earlier.

Still to come, the Institute of Supply Management's November manufacturing index will be published at 1500 GMT, as will November's JOLTS job openings report, while minutes from the Federal Open Markets Committee's latest meeting will be released at 1900 GMT.

No major corporate earnings were slated for release on Wednesday.

Reporting by Iain Gilbert at Sharecast.com