Futures for the Dow Jones industrials fell 0.4% and futures for the S&P 500 were down 0.3% before the bell.
Higher rates combat inflation by intentionally slowing the economy, while also dragging down on prices for investments. Inflation has been cooling since the summer amid last year’s blizzard of rate hikes, but the economy has also been showing signs of concern. Exxon shares rose about 1% before the bell Tuesday after the energy giant reported record annual profit but lower than forecast fourth-quarter sales.
In a positive sign, the IMF said the global outlook has grown slightly brighter as China eases its zero-COVID policies and economies show surprising resilience in the face of high inflation, elevated interest rates and Russia’s ongoing war against Ukraine. “China’s rapid reopening has boosted its domestic growth outlook, Europe’s mild weather has sharply reduced its recession risk, and a string of better inflation news has increased hopes that the Fed may be able to engineer a ‘soft landing’ in the U.S.,” said Stephen Innes, managing partner at SPI Asset Management.