Dow futures sink over 300 points, as investors dial back hopes for the Fed to switch course on rate hikes

There were hopes that the Federal Reserve would change course on its rate hikes.

At 7:10 a.m., the futures on the DJIA were down 0.9%. Recovering from deeper losses earlier in the day. The S&P 500 futures were down almost 1%. The major US stock indexes are expected to fall for a second day.

According to analysts, investors are waking up to the fact that the Fed will keep hiking rates into the foreseeable future and that will push borrowing costs up to 5% next year.

"Risk sentiment is under a cloud going into the end of the year, with talk of a renewed Russian offensive in Ukraine, and the rapid surge in COVID cases in China casting a long shadow."

A recession will hit the US economy next year as retail sales dropped more than expected. It was the biggest fall in 11 months, reflecting waning demand for goods as inflation and recession fears bite Americans' pocketbooks.

Elsewhere in the world.