Overnight, Fed chair Janet Yellen said in a testimony before Congress that recent economic data back the central bank's expectations of an improved job market. The U.S. non-farm payrolls number for November is due later today. Yellen added the bank will proceed with caution in raising interest rates from near zero and that Fed funds rates would remain accommodative after the initial increase.
Elsewhere, ECB president Mario Draghi announced monetary policy measures that fell short of market expectations. The central bank cut deposit rate by 10 basis points to negative 0.3 percent and said its asset purchase program will also be extended until at least March 2017 and broadened in scope.
Anatoli Annenkov, senior European economist at Societe Generale said in a note "While theories of a pushback from other Governing Council members to the Executive Board's recent dovish messages will flourish, it may simply reflect the conclusions the tasked ECB committees arrived at: that the recovery continues, that monetary policy is effective and that the new measures are judged enough."
U.S. markets saw steep losses overnight with the Dow Jones Industrial Average down 252 points or 1.42 percent at 17,478; the S&P 500 was down 30 points or 1.44 percent at 2,049. The Nasdaq was down 86 points or 1.7 percent at 5,038.