US stock futures gave up gains made earlier Wednesday, even after strong quarterly results from Netflix.
Dow Jones Industrial Average futures were down 121 points, or 0.4%. The S&P 500 and Nasdaq 100 futures were trading down 0.5% each.
Netflix shares rose 13% after the streaming giant Reported earnings and revenue that beat estimates and strong subscriber growth for the third quarter. Other tech-related names like Meta, Amazon, and Microsoft traded at a higher price in the primary market.
United Airlines, Intuitive Surgical and Procter & Gamble were among other names that rose in pre-market trading after strong quarterly reports.
The strong start to earnings season comes as many on Wall Street have reset their earnings forecasts lower, and investors are concerned about a recession. Although stocks rose in the first two days of the week, Treasury yields remained high and were on the rise on Wednesday, indicating that recession fears remain.
“On the plus side, corporate earnings season may help investor confidence somewhat, just given the current oversold conditions and lower expectations. That should help stocks maintain a foothold, but until we see 2 year and 10 year returns starting to come in. Down, we believe traders “should remain wary of expecting too much of this rally,” said Nick Colas of DataTrek Research.
Tech earnings will be in full swing next week, but IBM and Tesla are about to announce on Wednesday. Social media company Snap will report back later in the week.
In economic data, investors are looking forward to housing starts on Wednesday. It will also release the so-called “Beige Book” of the Federal Reserve, which is the central bank’s report on the current state of economic conditions.
Wednesday’s moves came after another strong day for stocks, with the Dow Jones climbing nearly 337 points on Tuesday, and the S&P 500 up 1.1%.