Stock futures give up earlier gains, turn negative despite Netflix’s strong results

U.S. stock futures gave up early Wednesday gains, even after the release of strong quarterly results from Netflix.

Dow Jones Industrial Average futures fell 121 points, or 0.4%. S&P 500 and Nasdaq 100 futures traded down 0.5% each.

Netflix shares rebounded 13% after the streaming giant delivered better-than-expected earnings and revenue along with strong subscriber growth in the third quarter. Other tech-related names such as Meta, Amazon and Microsoft traded higher in the pre-market.

United Airlines, Intuitive Surgical and Procter & Gamble were among other names rising in premarket trading after strong quarterly reports.

The strong start to the earnings season comes as many Wall Streets have lowered their earnings forecasts and investors worry about a recession. Even though stocks rallied in the first two days of the week, Treasury yields remain high and were climbing on Wednesday, suggesting recession fears are still intact.

“On the positive side, the corporate earnings season may boost investor confidence somewhat, given the current oversold conditions and reduced expectations. This should help equities stay on course, but until we see 2- and 10-year yields start to decline, we believe traders and investors should remain cautious and not expect too much from this rally,” said Nick Colas of DataTrek Research.

Tech earnings will be in full swing next week, but IBM and Tesla are on deck to report on Wednesday. Social media company Snap will report later in the week.

In economic data, investors are eagerly awaiting housing starts on Wednesday. The Federal Reserve’s so-called Beige Book, the central bank’s report on the current state of economic conditions, will also be released.

Wednesday’s moves came after another strong day for stocks, with the Dow Jones gaining around 337 points on Tuesday and the S&P 500 gaining 1.1%.

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