US futures fall after stock sell-off, as traders eye Fed minutes and new Russia sanctions

• US futures slipped Wednesday after a sell-off the day before, as traders eyed minutes from the Fed meeting.
• Focus was also on possible new EU sanctions on Russia following reports of war crimes in Ukraine.

US futures fell on Wednesday as traders prepared for the release of the minutes from the latest Federal Reserve meeting and Western governments prepared new sanctions on Russia.

S&P 500 futures were down 0.33%, Nasdaq 100 futures were 0.57% lower, and Dow Jones futures were 0.28% lower, suggesting the major indices may open in the red later on.

Investors remained cautious after a sell-off in US stocks on Tuesday saw the S&P 500 end 1.26% lower and the tech-heavy Nasdaq 100 fall 2.24%.

The Europe-wide Stoxx 600 index fell 0.98% in early trading Wednesday. Overnight in Asia, China's CSI 300 slipped 0.29%, while Tokyo's Nikkei 225 fell 1.58%.

The minutes from the Fed's March meeting are due to be released at 2 p.m. ET. Traders will closely scrutinize the document for any indications of the central bank's plans at its next meeting on May 4.

Markets have ramped up their expectations for Fed rate hikes this year, with many traders and economists expecting a 50-basis point increase in the federal funds rate in both May and June.

On Tuesday senior Fed official Lael Brainard said the central bank is prepared to take "stronger" action to tackle the hottest inflation in 40 years. She also said the Fed would reduce its holdings of bonds at a rapid pace.

Hugh Gimber, market strategist at JPMorgan Asset Management, told Insider: "I think a 50 basis point increase in May is very likely. I think it's quite feasible that they go again by 50 basis points in June."

Bond yields have risen sharply as markets have reappraised the Fed's plan of action. If investors expect interest rates to be higher in the future, they demand a higher return on bonds. Yields move inversely to prices.

The yield on the key 10-year US Treasury note jumped 6.6 basis points to 2.62% Wednesday, having started the year at around 1.63%.

Some economists think the Fed's interest rate hikes will hurt growth. Deutsche Bank became the first major lender to predict a US recession on Wednesday, saying one was likely in the next two years.

However, Gimber said he expects growth to slow slightly, but remain robust, given the high levels of employment.

"Growth is slowing, yes. Inflation is higher and it's going to be higher for longer, but there are several offsets to suggest that the US consumer looks relatively resilient," he said.

Attention was also focused on Europe, where governments are working on new sanctions against Russia in response to widespread reports of war crimes in Ukraine.

European Commission President Ursula von der Leyen proposed to ban coal imports from Russia and to completely cut off four Russian banks, including VTB, from the West.

Oil prices rose even as the EU avoided banning imports of Russian crude. Brent crude was up 1.08% to $107.79 a barrel while WTI crude was 1.3% higher at $103.39 a barrel.

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