- U.S. stock markets were down sharply after the open on Wednesday, as renewed turmoil in emerging markets dampened demand for riskier assets.

During early U.S. trade, the Dow Jones Industrial Average fell 0.9%, the S&P 500 dropped 0.85%, while the Nasdaq Composite index shed 0.65%.

Global equities sold off as investors continued to fret over turbulence in emerging markets, such as Turkey and South Africa.

The South African Reserve Bank became the latest emerging market central bank to raise interest rates in an effort to stem the local currency’s decline. The SARB hiked its benchmark interest rate to 5.5% from 5.0%, the first rate hike since June 2008.

The move comes after similar rate hikes by central banks in Turkey, India and Brazil.

Emerging markets economies have been hard hit in recent sessions by worries over the impact of cuts in Federal Reserve stimulus and concerns over a possible slowdown in China.

Shares in the financial sector were broadly lower, with JP Morgan down 1.5%, Bank of America slumping 1.2%, while Goldman Sachs and Morgan Stanley retreated 1.3% and 1.7% respectively.

In earnings news, Dow heavyweight Boeing saw shares tumble 6% after its 2014 full-year outlook disappointed investors.

Shares of AT&T slumped 3.5% after the telecommunications company’s wireless subscriber growth fell short of Wall Street expectations.

Yahoo saw shares plunge 7.3% after the company’s fourth quarter earnings report released after Tuesday’s closing bell disappointed investors.

On the upside, Dow Chemical shares rallied 5% after reporting better-than-expected fourth quarter earnings and revenue figures. The firm also said it was boosting its stock buyback program to USD4.5 billion.

Meanwhile, Facebook saw shares slide 2.5% ahead of the company’s quarterly earnings report due out after the closing bell.

Market players prepared for the outcome of the Federal Reserve’s policy meeting later in the day, amid expectations for a USD10 billion reduction in the central bank’s now USD75-billion-a-month stimulus program.

The policy meeting will mark the last for outgoing Fed Chairman Ben Bernanke, as current Vice Chair Janet Yellen prepares to take over. The central bank announced its first cut to its USD85 billion in monthly bond purchases in December, citing an improving economy.

Across the Atlantic, European stock markets turned sharply lower as the effects of Turkey’s aggressive monetary policy move appeared to dim. The EURO STOXX 50 lost 1.6%, France’s CAC 40 dropped 1.5%, Germany''s DAX sank 1.55%, while Britain''s FTSE 100 declined 1.1%.

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