The US bourse is set to open higher as European leaders get ready to meet.

New York - Wall Street stocks fell on Wednesday as concerns about the impact of a possible cut in the US Federal Reserve's monthly bond-buying program kept investors cautious.

Global equity markets got an early boost from Turkey's central bank, which stunned investors late Tuesday with a dramatic rate hike designed to defend its crumbling currency.

But the euphoria quickly faded as the market's focus shifted to Fed's decision, due at 2 p.m. ET.

Ahead of the opening bell on Wall Street, South Africa's Reserve Bank raised interest rates for the first time in nearly six years, in step with other emerging market economies that have tightened monetary policy to shore up their declining currencies.

“Our markets are so linked together that if something pulls a trigger, it's like a domino effect. We are not exactly sure how one would impact (the decision of) but things happen fast and investors get quickly nervous,” said Joe Saluzzi, co-head of equity trading at Themis Trading in New York.

The Dow Jones industrial average fell 122.65 points or 0.77 percent, to 15,805.91, the S&P 500 lost 12.42 points or 0.69 percent, to 1,780.08 and the Nasdaq Composite dropped 30.844 points or 0.75 percent, to 4,067.119.

In earnings, Boeing Inc shares fell 5 percent to $130.27 despite reporting a 26 jump in quarterly profit due to a rise in commercial aircraft deliveries.

Dow Chemical Co shares rose 5.8 percent to $45.56 after raising its dividend 15 percent and expanding its share buyback program to $4.5 billion from $1.5 billion. Quarterly profit was well ahead of expectations.

Yahoo Inc shares plunged 6.5 percent to $35.70 a day after announcing a decline in online ad prices which hurt its revenue for a fourth consecutive quarter.

Alibaba, the Chinese e-commerce giant in which it owns a big stake, saw revenue growth decelerate. - Reuters