U.S. stock-index futures declined sharply on Wednesday, with Dow futures down more than 100 points, as investors confronted less-than-expected earnings outlooks, worries about emerging markets and braced for the Federal Reserve's next move on stimulus.
"Earnings so far have been nothing to write home about, and it seems that no matter what, the market has found something imperfect even in the best of earnings," said JJ Kinahan, chief strategist at TD Ameritrade.
In addition, Turkey's currency has jumped against the dollar in the wake of that nation raising their interest rates, rattling investors. "There continues to be growing concerns over emerging markets and that we may have some problems there," he added.
Futures initially rallied sharply following news that Turkey's central bank had sharply raised its interest rates late Tuesday afternoon. In immediate reaction, Dow futures spiked as much as 150 points and the Turkish lira rose to 2.2 against the dollar.
In its first emergency meeting since 2011, Turkey's central bank hiked its overnight lending rate to 12 percent from 7.75 percent. The move is aimed at stemming the lira's sharp declines and follows an unexpected rate hike by India's central bank.
"This much more aggressive response than markets had anticipated prompted a sharp jump in the Turkish lira, and in the process gave a significant boost to equity market futures," Michael Hewson, chief market analyst at CMC Markets, said in a morning note.
The decision came ahead of the Federal Reserve policy announcement later on Wednesday at 2 p.m. ET, when the central bank is expected to cut another $10 billion from its now $75-billion-a-month bond-buying program.
"The overwhelming consensus is that the Fed will deliver another $10 billion taper at this month's meeting, so any deviation from that view could bring substantial volatility to markets," said Deutsche Bank's Anthony Ip and Jim Reid.
(Read more: In calmer waters, Bernanke hands Fed to Yellen)
In his State of the Union speech on Tuesday evening, President Barack Obama offered strategies for co-opting a divided Congress and boosting middle-class prosperity. His ideas included a wage hike for federal contract workers and the creation of a "starter savings account" to help millions of people save for retirement.