US stock index futures tumbled in early trade on Wednesday as concerns over the Federal Reserve's aggressive rate-hike path outweighed robust corporate earnings and stimulus plans in China. S&P 500 futures lost 0.8% after a failed attempt to extend the rally on Tuesday. Nasdaq 100 futures dropped by 0.9%, indicating a continuing sell-off of tech stocks amid decreasing risk appetite.

Only Treasury yields have risen as investors are awaiting the release of the FOMC Minutes. They are now gradually selling bonds, expecting a new outlook for monetary tightening. They would also like to know how sensitive policymakers will be to weaker economic data, which is set to be published in the early fall, as it could indicate that the economy is sliding into recession.

US stocks have been on the rise lately due to record inflation and a good earnings season, with four out of five companies meeting or exceeding economists' estimates. However, continuing rate hikes and high recession risks for the world's largest economy are weighing on market sentiment. The FOMC Minutes are expected to be hawkish, which could harm the stock market.

China may resort to additional stimulus measures to support its weakening economy. After a series of disappointing reports in the wake of a downturn in real estate and Covid restrictions, Chinese Premier Li Keqiang called on six major provinces, which account for 40% of the economy, to boost pro-economic growth measures.

The yield on 10-year and 2-year government bonds rose by 7 and 5 basis points respectively. The spread between them remains inverted at around 45 basis points, indicating a looming recession.

As for the commodity market, oil has traded within the channel since falling below the 6-month low. There have been concerns about a tough economic forecast amid high inflation and monetary tightening.

Today, the United States will see the release of data on retail sales. The figures are expected to fall in July.

Premarket

Applied Materials Inc. and PayPal Holdings Inc. lost 1.3%. Teach stocks have been bearish lately due to the Federal Reserve's aggressive stance on interest rates.

Target's shares tumbled by 3.3% when the retailer reported quarterly earnings of 39 cents per share, well below the consensus of 72 cents.

Manchester United's shares soared by 4.6% when Elon Musk joked about buying the British football club in a tweet.

Bed Bath & Beyond's shares surged by 22.8%. The retailer popular with meme stock investors has seen its shares quadruple in the last 14 sessions.

Sanofi lost 5.4% when the French drug maker announces it would stop the development of a drug against breast cancer. Sanofi's experimental medicine failed in a clinical test.

Technical analysis of S&P 500

The index has fallen steeply and a lot now depends on retail sales data and the FOMC Minutes. Should the trading instrument remain bearish, bulls should act near $4,265 support as this could help strengthen the uptrend and build the lower limit of the ascending channel. The index could show growth when the price reaches $4,319 resistance. The target is seen at $4,376, where bearish power could increase. Some traders could consider taking profit on long positions. A more distant target stands at $4,433. In case of new weak earnings reports and disappointing US statistics, the price could break through $4,265 and head towards $4,234, where bullish power will build up. If bears push the price to $4,184, in line with the lower limit of the ascending channel that emerged on July 14, a breakout through the range could lead to a fall to $4,150 and $4,116.