In this April 25, 2012, file photo, Federal Reserve Chairman Ben Bernanke arrives for a news conference at the Federal Reserve in Washington.(Photo: Susan Walsh, AP)

Story Highlights

  • Fed to make policy call Wednesday
  • Two-day meeting is Ben Bernanke's last as Fed chief
  • Wall Street digests Turkey's aggressive interest rate hikes
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U.S. stock futures were lower Wednesday, as investors weighed Turkey's move to hike interest rates in an effort to stem emerging market turmoil and eagerly awaited the Federal Reserve's policy decision later in the session.

Wall Street expects the Fed to continue to to further reduce its stimulus for the U.S. economy when it wraps up its two-day meeting, despite a hiccup in job growth in December and recent market turbulence in developing markets.

The Fed meeting that concludes Wednesday will be the last to be presided over by Ben Bernanke, who is stepping down after eight years as chairman and will be succeeded next week by Vice Chair Janet Yellen. She is expected to stick closely with Bernanke's policies.

Dow Jones industrial average index futures were down 0.5% and Standard & Poor's 500 index futures fell 0.4%. Nasdaq index futures dipped 0.4%. Investors are still grappling with the potential fallout in developed markets like the U.S. from the recent crisis in emerging markets.

Jitters about emerging economies were soothed by the Turkish central bank's aggressive interest rate hike to stabilize its currency and China's infusion on funds into its banking system. Turkey's central bank hiked overnight lending rate to 12% from 7.75% — a move more aggressive than what most analysts expected.

Turkey's rate hike is viewed as a test case for other emerging market countries. The move is intended to stem capital flight from these countries and combat inflation. The downside is that rising rates can hobble domestic economies as borrowing rates rise.

EMERGING MARKETS: Turkey jacks up interest rates to stabilize currency

Wall Street will also be eyeing earnings reports from U.S. companies. Before the opening bell, Dow Chemical topped earnings forecasts by a wide margin and also topped revenue projections. Aircraft maker Boeing also topped both earnings per share and revenue projections.

On Tuesday, U.S. stocks broke a losing streak carried over from last week.

The S&P 500 rose 10.94 points, or 0.6%, to 1,792.50. The Dow gained 90.68 points, or 0.6%, to 15,928.56. The Nasdaq climbed 14.35 points, or 0.4%, to 4,097.96.

TUESDAY: Stocks rise as Dow breaks losing streak

Key benchmarks in Asia advanced on Wednesday. Japan's Nikkei 225 jumped 2.7% to 15,383.91 and Hong Kong's Hang Seng rose 0.8% to 22,141.61. China's Shanghai composite was up 0.6% at 2,049.91.

The main regional benchmarks in Europe were turned lower in late trading. Britain's FTSE 100 index was down 0.3% to 6,550 and the DAX index in Germany dropped 0.3% to 9,380.

Benchmark oil for March delivery was down 33 cents to $97.08 per barrel in electronic trading on the New York Mercantile Exchange. The contract gained $1.69 to settle at $97.41 a barrel on Tuesday.

Contributing: Associated Press

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