Wall St Set To Open Lower On Fed, Ukraine Jitters

U.S. stocks were set to open lower on Wednesday after stronger-than-expected retail sales data gave the Federal Reserve more ammunition to tighten policy, while geopolitical tensions over Russian and Ukraine added to caution.

Retail sales rose 3.8% in January, data showed, rebounding sharply from the previous month, led by a surge in purchases of motor vehicles and other goods. Economists had forecast a rise of 2.0%.

The data comes ahead of minutes from the Fed's previous meeting, due at 2 p.m. ET. Investors are looking for more clues on the central bank's plans to trim its massive balance sheet and hike interest rates.

"If the consumer can absorb, continue to spend and thrive throughout this inflationary period, that gives the Federal Reserve more leeway to be aggressive in its monetary policy," said Keith Buchanan, portfolio manager at Globalt Investments in Atlanta.

Futures lost some ground after U.S. Secretary of State Antony Blinken said Russia has been moving critical units closer to Ukraine's border and that the United States has so far not seen any pullback of Moscow's forces in the area.

Comments from Moscow saying more of its forces surrounding Ukraine were withdrawing had spurred a rally in risky assets on Tuesday. The Nasdaq surged 2.5%, while the S&P 500 and the Dow Jones each ended more than 1% higher.

At 09:00 a.m. ET on Wednesday, Dow e-minis were down 128 points, or 0.37%, S&P 500 e-minis were down 19.5 points, or 0.44%, and Nasdaq 100 e-minis were down 88.25 points, or 0.6%.

Shares of big banks dropped, while those of major growth names Apple Inc, Google-owner Alphabet Inc, Amazon.com Inc, Microsoft Corp, Meta Platforms Inc and Tesla Inc fell between 0.2% and 3.2% after rallying strongly on Tuesday.

In earnings moves, Canadian e-commerce firm Shopify slumped 10.7% after it forecast a slowing pace in first-half revenue growth, while Roblox Corp tumbled 21.3% after the gaming platform missed analysts' expectations for quarterly bookings.

ViacomCBS slumped 14.8% after it missed profit forecasts. The company announced it will change its name to Paramount and unveiled a broad range of new programming as it attempts to stay ahead in the crowded streaming space.

Airbnb <ABNB.O> rose 2.0% after the short-term home rental company forecast better-than-expected first-quarter revenue on strong travel demand and longer stays.

Devon Energy Corp rose 1.9% after the oil producer reported fourth-quarter results above Wall Street estimates.