By Anisha Sircar and Devik Jain
(Reuters) -U.S. stock indexes were set for a lower open on Wednesday ahead of minutes from the Federal Reserve's May meeting, which will likely offer clues on the path of future rate hikes amid worries about slowing economic growth.
The minutes are due at 1400 ET (1800 GMT). U.S. Federal Reserve Chair Jerome Powell has promised to keep pushing on rate hikes until there is clear and convincing evidence that inflation is dropping.
"You will see a little more of a hawkish tone (today) and a bit more pivot from full employment to making sure that inflation is being fought," Mike Mullaney, director of global markets research at Boston Partners, said.
"If the Fed continues on the path they've suggested, you'll see a greater probability of a recession in 2023."
The S&P 500 and the Nasdaq ended lower in the previous session on worries that aggressive moves to curb decades-high inflation might tip the U.S. economy into recession, while a profit warning from Snap Inc (NYSE:SNAP) also roiled markets.
The benchmark index is down 17.3% so far this year, while the Nasdaq has fallen 28%.
The U.S. central bank at its May meeting raised the benchmark overnight interest rate by half a percentage point, the biggest jump in 22 years, and set its target federal funds rate to a range between 0.75% and 1% in a unanimous decision.
Money markets are pricing in 50 basis point hikes in June and July..
"If we do force a recession, there's still more downside risk for the S&P 500. You could see a 5% to 6% rally at any point, but it basically becomes a dead cat bounce," Mullaney added.
At 8:46 a.m. ET, Dow e-minis were down 120 points, or 0.38%, S&P 500 e-minis were down 15 points, or 0.38%, and Nasdaq 100 e-minis were down 49.75 points, or 0.42%.
Nordstrom Inc (NYSE:JWN) rose 4.4% in premarket trading after the upscale retailer raised its annual profit and revenue forecasts, counting on demand from affluent consumers to help it overcome price pressures.
Wendy's Co jumped 8.9% after a regulatory filing showed the burger chain's largest shareholder Nelson Peltz was considering a potential takeover bid for the company.
Megacap growth stocks fell, with Tesla (NASDAQ:TSLA) Inc and Apple Inc (NASDAQ:AAPL) down 1% each.
The CBOE volatility index, also known as Wall Street's fear gauge, rose for the second straight day and was last up at 30.08 points.