Stocks indexes were set to fall more than 1 percent at the open on Wednesday after weaker manufacturing data from China and a gloomier growth outlook from the Federal Reserve underscored a lackluster global economic recovery.

Reflecting the soured sentiment, investors fled to safer investments like the U.S. dollar, which rose 1.3 percent against a basket of major currencies <.DXY>. Oil futures dipped 1.6 percent to $78.98 a barrel.

China reported a slowdown in factory output, adding to the picture of softening domestic demand painted by other data a day earlier that showed a sharp drop in import growth.

The U.S. trade deficit widened a surprising 18.8 percent in June, its highest since October 2008.

The Federal Reserve downgraded its outlook on the economy on Tuesday and said it would begin funneling proceeds from maturing mortgage bonds it holds into longer-term government debt to keep borrowing costs low.

But a tepid response in stocks suggested investors didn't see the actions as having much immediate impact on the weak labor market and slowing consumer spending, two headwinds facing the recovery.

If one of the Fed's goals in yesterday's statement was to instill confidence in the market that they will do anything to make things better, they accomplished the exact opposite in that today we are even more worried about economic growth not only by the recent data but by the constant desire on the part of the Fed to do something, Peter Boockvar, equity strategist at Miller Tabak + Co in New York, said in a note to clients.

S&P 500 futures fell 17.7 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures dipped 140 points, and Nasdaq 100 futures fell 30.25 points.

Macy's Inc shares rose 1.1 percent to $19.60 before the opening bell following better-than-expected quarterly results. Cisco Systems , due to report earnings after the bell, fell 1.4 percent in premarket trade.

Walt Disney Co shares fell 0.4 percent premarket after an initial gain as the company posted results showing hit movies like Toy Story 3 and higher advertising sales lifted the firm's quarterly profit above Wall Street's expectations, despite dwindling theme park attendance in the United States.

World stocks hit a 1-1/2 week low on Wednesday, and the MSCI world equity index <.MIWD00000PUS> fell more than 1 percent.

(Editing by Padraic Cassidy)