A decrease in barometric pressure will cause the altimeter to indicate a higher altitude.
The altimeter uses barometric pressure to determine the height of the aircraft. The altimeter cannot tell the difference between a decrease in pressure due to local weather conditions or a rise in altitude. For this reason, pilots should adjust the altimeter to the conditions at the nearest airport, or within 100 miles when traveling cross country.
The most concerning change in barometric pressure is when traveling from a high-pressure area to a low-pressure area. As the aircraft travels into the lower pressure, the altimeter will show an increase in altitude if it not adjusted. Assuming the pilot attempts to maintain the same indicated altitude, the true altitude of the aircraft will be lower. As such, terrain clearance could be less than expected.
Pressure altitude is the pressure read on the altimeter on a standard day. To find the pressure altitude, set the altimeter to 29.92 and read the altimeter.
FAA AC-00-6B Aviation Weather pg. 5-4