Feb 22 (Reuters) - U.S. stock index futures were trading flat on Wednesday after Wall Street posted its worst performance of the year a day earlier as investors treaded cautiously ahead of the minutes from the Federal Reserve's latest rate-setting meeting.
The main indexes shed more than 2% on Tuesday as investors interpreted a rebound in U.S. business activity in February to mean interest rates will need to stay higher for longer to control inflation.
Minutes from the Fed's Jan.31-Feb.1 meeting, expected at 2:00 p.m. ET (1900 GMT), is anticipated to detail the breadth of debate at the central bank over how much further interest rates may need to be raised to slow inflation.
Following a market rout in 2022, the three major indexes logged monthly gains in January as investors hoped the Fed would pause its rate hikes and perhaps turn a corner in its monetary policy tightening around the year-end.
However, stocks have had a volatile run in February as traders priced in higher interest rates for longer, considering inflation still remains above the 2% target in the face of a sturdy economy.
Money market participants expect rates to peak at 5.35% by July and stay around those levels till the end of 2023.
At 07:13 a.m. ET, Dow e-minis were up 26 points, or 0.08%, S&P 500 e-minis were up 2.5 points, or 0.06%, and Nasdaq 100 e-minis were up 12 points, or 0.1%.
Among single stocks, Palo Alto Networks Inc (PANW.O) rose 9.3% in premarket trading after the cybersecurity company raised its annual profit forecast. Rival Crowdstrike Holdings Inc (CRWD.O) gained 2%.
U.S.-listed shares of Baidu Inc advanced 6.6% after China's e-commerce beat fourth-quarter revenue estimates and announced a new share repurchase program.
CoStar Group (CSGP.O) dropped 15.2% as the online real estate marketplace provider said it was no longer in talks to buy Realtor.com owner Move Inc from News Corp (NWSA.O) and forecast disappointing first-quarter revenue.
St. Louis Fed President James Bullard said rates will have to go north of 5% to tame inflation. New York Fed President John Williams, a voting member of the rate-setting committee this year, is scheduled to speak later in the day.
