US pre-open: Stocks to nudge up as investors continue to digest Fed minutes

US futures pointed to small gains at the open on Thursday following losses in the previous session, as interest rate concerns continued to play on investors' minds.

At 1220 GMT, Dow Jones Industrial Average futures were flat, while S&P 500 and Nasdaq futures were up 0.2% and 0.1%, respectively, after all three indices ended Wednesday's session in the red as minutes from the US central bank's meeting at the end of last month pointed to at least three rate hikes this year.

The minutes revealed that Fed officials see an increased economic growth outlook and a rise in inflation as justification to keep lifting rates gradually.

"A majority of participants noted that a stronger outlook for economic growth raised the likelihood that further gradual policy firming would be appropriate," the minutes stated. Previously, the policy statement said that gradual increases in the federal funds rate were likely to be appropriate but the use of the word "further" this time around is what seemed to really rattle investors.

Daiwa Capital Markets said that "further" could mean more increases than currently built into the dot plot, or it could mean more than the five changes that have occurred since late 2015.

"In reading the minutes we did not get the sense that the Committee was attempting to signal a likely upward shift in the dot plot (i.e. four tightenings). Rather, we viewed the wording change as a signal that officials were more confident that the economy would be performing well and that the Fed would remain active this year. To be sure, four tightenings are possible this year, especially with the budget agreement adding another dose of fiscal stimulus, but four shifts are not assured."

It stuck to its forecast of three for now but said this would quickly change if the economy shows signs of growing faster than 2.5%.

The hawkish tone of the minutes sent stocks lower, the dollar higher and the yield on the 10-year Treasury bond to a fresh four-year high above 2.94% on Wednesday.

Craig Erlam, senior market analyst at Oanda, said: "The minutes from the January meeting, like the statement that accompanied it, were quite hawkish and pointed to at least three rate hikes this year. While this is now strongly priced in - more than 50% - there is potential for a fourth and more again next year, something that appears to be worrying investors and shaking confidence in equity markets."

With interest rates firmly in focus, investors will be eyeing speeches later in the day from New York Fed President William Dudley and Atlanta Fed President Raphael Bostic.

In corporate news, shares in streaming video company Roku Inc tumbled in pre-market trade following a disappointing outlook late on Wednesday, while Cheesecake Factory looked set for losses as its quarterly revenue fell short of expectations.

Elsewhere, Chesapeake Energy racked up strong pre-market gains after better-than-expected fourth-quarter earnings.

On the data front, initial jobless claims are at 1330 GMT.