U.S. stocks were set for a lower open on Thursday, a day after the Federal Reserve's less aggressive tone sparked a rally on Wall Street, with investors keeping an eye out for jobs data this week for more clues on future rate hikes.

Citigroup slipped 0.7% in premarket trading to lead losses among big banks. Megacap companies slid, with Meta Platforms and Amazon.com down 1% each.

The benchmark S&P 500 index recorded its biggest one-day percentage gain in nearly two years on Wednesday, after the Fed raised its benchmark overnight interest rate by half a percentage point as expected and said it would begin shrinking its $9 trillion asset portfolio next month in an effort to further lower inflation.

Fed Chair Jerome Powell explicitly ruled out raising rates by 75 basis points in a coming meeting, calming nerves over fears of aggressive policy tightening.

"I don't think it's surprising that short-term traders are looking to lock in some profits," Sam Stovall, chief investment strategist at CFRA, said.

"The real question is, was yesterday's rally simply a reflex rally because stocks had been oversold and are we now just headed back in the same direction as we were prior to the Fed meeting."

The focus now shifts to the U.S. Labor Department's closely watched monthly employment report on Friday for clues on labor market strength and its impact on monetary policy.

Worries about Fed policy moves, mixed earnings from some big growth companies, the conflict in Ukraine and pandemic-related lockdowns in China have hammered Wall Street recently, overshadowing a better-than-expected quarterly reporting season.

The tech-heavy Nasdaq has declined 17.1% year-to-date, compared with a 9.8% drop in the S&P 500 and a 6.3% fall in the blue-chip Dow.

Of the 368 S&P 500 companies that have reported earnings as of Wednesday, 79.9% have topped analyst expectations, according to Refinitiv data.

At 08:40 a.m. ET, Dow e-minis were down 161 points, or 0.47%, S&P 500 e-minis were down 26.5 points, or 0.62%, and Nasdaq 100 e-minis were down 105.75 points, or 0.78%.

Twitter Inc rose 2.2% as Elon Musk secured $7.14 billion in funding from a group of investors that includes Oracle Corp co-founder Larry Ellison to fund his $44 billion takeover of the social-media company.

EBay Inc and Etsy Inc slid 7.0% and 12.3%, respectively, after the online retailers projected downbeat second-quarter revenue.

Albemarle Corp jumped 13.7% as the lithium producer raised its full-year forecasts on robust demand and higher prices for the metal used in electric vehicle batteries.

Booking Holdings climbed 10.3% after the online travel agency posted upbeat first-quarter earnings and said global travel trends pointed to a busy summer season, especially in Europe.

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The Federal Reserve's apparent willingness to hike interest rates to stop inflation has rattled Wall Street Photo: AFP / Stefani Reynolds