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U.S. stock-index futures came under heavy pressure Wednesday amid intense volatility in emerging-market currencies sparked by a series of rate moves.
As of 9:00 a.m. ET, Dow Jones Industrial Average futures fell 132 points, or 0.83%, to 15745, S&P 500 futures dipped 14.5 points, or 0.81%, to 1773 and Nasdaq 100 futures slumped 31.5 points, or 0.93%, to 3468.
Central bank news was in the spotlight Wednesday. The Turkish central bank hiked rates far more than analysts expected Tuesday evening in a bid to protect its currency, the lira. Initially, the lira rallied 4% on the dramatic move. However, South Africa weighed in Wednesday with a 0.5 percentage point rate hike, also aimed at defending its currency, the rand.
South Africa's rate increase "certainly wasn’t enough for the market as the rand is still down on the day to a 5-year low, said Peter Boockvar, chief market analyst at The Lindsey Group.
Meanwhile, the lira gave up all of its gains for the day and turned red. Other currencies fell as well. Indeed, Russia's ruble slid to a record low against a basket of world currencies, according to data from Bloomberg News.
The issues might not resolve themselves too quickly, either.
"These types of dislocations usually do not resolve themselves in hours or even days," said Dan Greenaus, chief equity strategist at BTIG. "It takes time and we imagine the current situation will be similar."
The concern is that as interest rates rise in the developed world, capital might move away from emerging markets, pressuring currencies and economies. Rate hikes could help boost traders' appetite for riskier emerging debt and equities.
The Federal Reserve's monetary-policy decision is due out at 2 p.m. ET. At the Fed's last meeting it began paring back its bond-buying program by $10 billion a month, bringing the total purchases to $75 billion a month. Economists are mixed on whether the Fed will taper again or hold steady amid a string of lukewarm economic data and worries about emerging markets.
In corporate news, Boeing (BA) posted fourth-quarter results that topped analysts' expectations. However, the aerospace giant revealed a considerably weaker-than-expected full-year outlook. Yahoo! (YHOO) also slid after the media company posted a tepid forward outlook.
There are no other major economic reports due out on the day.
In commodities, U.S. crude oil futures fell 10 cents, or 0.09%, to $97.32 a barrel. Wholesale New York Harbor gasoline jumped 0.94% to $2.653 a gallon. Gold rose $10.30, or 0.83%, to $1,261 a troy ounce.