Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., January 26, 2022.
Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., January 26, 2022. Reuters / BRENDAN MCDERMID

U.S. stock index futures dipped on Friday at the end of a choppy week marked by the Federal Reserve hiking interest rates and no signs of an end to the war in Ukraine.

The broad declines could snap a three-day rally that had put the S&P 500 index and the Dow Jones Industrial Average on track for their best week since November 2020.

U.S. President Joe Biden was due to talk with Chinese president Xi Jinping by phone at 9 a.m. Eastern time (1300 GMT), warning that Beijing will pay a price if it supports Russia's military operations in Ukraine.

Meanwhile, Russia continued its bombardment of Ukrainian cities as it fired missiles at an airport near Lviv on Friday amid little sign of any breakthrough in peace talks.

Markets digested news around the conflict and the Fed's expected move to raise its key lending rate by a quarter of a percentage point on Wednesday. The U.S. central bank also forecast an aggressive plan for further hikes while policymakers trimmed economic growth projections for the year.

"We prefer a hedging strategy and selective equity exposure over exiting risk assets," wrote Mark Haefele, chief investment officer at UBS Global Wealth Management in a client note.

"Energy stocks provide a hedge against risks arising from the war in Ukraine, while financials and value stocks tend to outperform in periods of rising rates."

At 6:45 a.m. ET, Dow e-minis were down 189 points, or 0.55%, S&P 500 e-minis were down 29.5 points, or 0.67%, and Nasdaq 100 e-minis were down 100 points, or 0.71%.

Shares of Boeing Co rose 0.4% as it closed in on a landmark order from Delta Air Lines for up to 100 of its 737 MAX 10 jets, people familiar with the matter said.

U.S. delivery firm FedEx Corp fell 3.1% as it posted lower-than-expected quarterly earnings on Thursday, while video game retailer GameStop Corp slipped 8.3% on reporting a net loss for the fourth quarter.

The day also marks "triple witching", where investors unwind positions in futures and options contracts before they expire which often leads to large unexpected moves in markets.