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By 06:35 ET (10:35 GMT), the Dow Futures contract was down 35 points, or 0.1%, S&P 500 Futures traded 7 points, or 0.2%, lower and Nasdaq 100 Futures dropped 40 points, or 0.3%.
The blue-chip Dow Jones Industrial Average closed almost 200 points, or 0.6%, lower on Tuesday, the start of a holiday-shortened week, while the tech-heavy Nasdaq Composite dropped 0.1% and the broad-based S&P 500 fell 0.4%.
Weighing on global sentiment this week has been a sharp rise in oil prices after major producers Saudi Arabia and Russia unexpectedly extended their voluntary supply cuts to the end of the year.
Although crude has slipped back Wednesday, with the WTI contract 0.3% lower at $86.42 a barrel and the Brent contract down 0.5% to $89.61, investors are concerned that the jump in oil prices to their highest level this year with have an impact on inflation and thus how the Federal Reserve will move interest rates going forward.
The Fed is widely seen as holding off on another interest rate increase in September, with Governor Christopher Waller saying on Tuesday the latest round of economic data was giving the U.S. central bank space to see if it needs to raise interest rates again.
There is more data due Wednesday, including the Fed’s Beige Book survey of its 12 district banks which will provide investors with an on-the-ground glimpse at economic conditions around the country.
The ISM non-manufacturing purchasing managers’ index is projected to come in at 52.5 in August, down from 52.7 in the prior month. This figure serves as a gauge of activity in the services industry, a crucial sector that accounts for over two-thirds of the U.S. economy.
Investors will also get the chance to hear from several Fed speakers during the coming week, with Dallas Fed President Lorie Logan due later Wednesday.
Economic news from Europe and China has been disappointing this week, and that tone continued Wednesday with retail sales in the eurozone falling and German factory orders slumping in July.
In corporate news, the tech sector will be in focus after the European Commission designated Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL), Alphabet (NASDAQ:GOOGL), Meta (NASDAQ:META) and Microsoft (NASDAQ:MSFT), along with China’s ByteDance, as “gatekeepers” under its new Digital Markets Act.
These companies will be required to make their messaging apps interoperate with rivals and let users decide which apps to pre-install on their devices. They will also not be allowed to favor their own services over rivals’ or prevent users from removing pre-installed software or apps.
Elsewhere, GameStop (NYSE:GME), ChargePoint (NYSE:CHPT) and American Eagle Outfitters (NYSE:AEO) are among the companies slated to report earnings after the close.
Manchester United (NYSE:MANU) will also be in focus after the English soccer club’s stock fell 18% on Tuesday, the steepest one-day decline, following a report that its owners, the Glazer family, are going to take the club off the market, having failed to get close to their anticipated asking price.
Additionally, gold futures fell 0.1% to $1,952.05/oz, while EUR/USD traded 0.2% higher at 1.0739.
