Futures dip as tech stocks extend fall; Fed minutes eyed

© Reuters. FILE PHOTO: The Wall St. sign is seen outside the New York Stock Exchange (NYSE) in New York, U.S., December 17, 2019. REUTERS/Brendan McDermid

By Devik Jain and Shreyashi Sanyal

(Reuters) -U.S. stock indexes were set for a lower open on Wednesday ahead of minutes from the Federal Reserve's December meeting, as big technology stocks extended their fall.

The Dow Jones Industrial Average posted an all-time closing high on Tuesday as market participants rotated into economically sensitive energy, financials and industrials shares from technology names that dragged the S&P 500 and the Nasdaq indexes lower.

Tech heavyweights Google-owner Alphabet (NASDAQ:GOOGL) Inc, Microsoft Corp (NASDAQ:MSFT), Meta Platforms, Advanced Micro Devices (NASDAQ:AMD) Inc, Tesla (NASDAQ:TSLA) Inc and Nvidia (NASDAQ:NVDA) Corp fell between 0.2% and 1% in premarket trading.

Interest-rate sensitive growth shares were also under pressure from a recent rise in U.S. Treasury yields, sparked by growing angst towards the prospect of interest rate hikes by the Fed to curb inflation. [US/]

The U.S. central bank said last month it would end its pandemic-era bond buying in 2022, signaling at least three interest rate hikes for the year. Minutes from the meeting are due at 1400 ET/1900 GMT.

"With interest rates expected to rise this year, there is a likelihood that tech stocks could end up feeling some more pressure," said Sam Stovall, chief investment strategist at CFRA Research in New York.

"Investors would continue to rotate away from the growth categories and move more towards the value side of the equation."

Salesforce.com Inc (NYSE:CRM) fell 3.3% after UBS lowered its rating on the stock to "neutral" from "buy".

Shares of oil companies and major Wall Street lenders continued their march higher, with Marathon Petroleum Corp (NYSE:MPC) and Goldman Sachs Group Inc (NYSE:GS) leading the packs.

At 8:22 a.m. ET, Dow e-minis were down 9 points, or 0.02%, S&P 500 e-minis were down 4.75 points, or 0.1%, and Nasdaq 100 e-minis were down 73.75 points, or 0.45%.

The ADP National Employment report showed private payrolls increased by 807,000 jobs last month, more than double of what economists polled by Reuters had forecast.

The report comes ahead of the Labor Department's more comprehensive and closely watched employment data for December on Friday.

Peloton Interactive (NASDAQ:PTON) fell 1.7% after J.P. Morgan cut its price target on the fitness firm's stock on expectations of softer demand.

AT&T Inc (NYSE:T) rose 0.8% after the U.S. telecom company added 880,000 monthly paying phone subscribers in the fourth quarter.

U.S.-listed shares of Alibaba (NYSE:BABA) Group and Bilibili (NASDAQ:BILI) Inc were down 1.2% and 4.3%, respectively, as China's top market regulator fined the companies' units for failing to properly report about a dozen deals.

Beyond Meat (NASDAQ:BYND) jumped 8.9% after Yum Brands' KFC said it would start selling plant-based fried "chicken" from the vegan meat maker across the United States for a limited time.

Meanwhile, Citigroup (NYSE:C) analysts said they now expect the S&P 500 index to touch 5,100 by the end of 2022 on the back of strong corporate earnings.