US STOCKS-Nasdaq leads drop in futures ahead of Fed rate decision

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Futures down: Nasdaq 1.34%, S&P 0.99%, Dow 0.71%,

Jan 30 (Reuters) - Nasdaq led declines in U.S. futures on Monday, dropping more than 1%, with growth stocks falling at the start of a week packed with central bank rate decisions and earnings from several high-profile companies.

The U.S. Federal Reserve is seen hiking the Fed funds rate by 25 basis points (bps) at the end of its two-day policy meeting on Wednesday, close on the heels of data showing signs of slowing demand and cooling inflation.

"The interest rate snowball is gathering speed, and its squashing down demand in its path," Susannah Streeter, markets analyst at Hargreaves Lansdown wrote in a client note.

"Although rate rises are causing the U.S. economy to slip up, hopes have come in flurries that it will still have a soft landing. But there is nervousness ahead of the crucial Fed meeting this week."

This will likely be the smallest rate increase since the Fed kicked off its tightening cycle 10 months ago with a 25 bps hike, with financial markets pricing in a final rate hike in March.

Money markets now see rates peaking at 4.9% in June, still below the 5% level expected by Fed policymakers.

Heavyweight growth stocks, including Apple Inc, Amazon.com Inc and Alphabet Inc, fell about 1.5% each in premarket trading. They will report quarterly earnings on Thursday, after the bell.

The tech-heavy Nasdaq index notched its fourth straight weekly gain on Friday.

At 6:25 a.m. ET, Dow e-minis were down 242 points, or 0.71%, S&P 500 e-minis were down 40.25 points, or 0.99%, and Nasdaq 100 e-minis were down 164 points, or 1.34%.

Other major central banks including the European Central Bank and the Bank of England are also seen raising interest rates later in the week. (Reporting by Shreyashi Sanyal and Johann M Cherian in Bengaluru Editing by Vinay Dwivedi)