Dow Futures Waver, Bond Yields Fall Back—and What Else Is Happening in the Stock Market Today

Corporate earnings season has kicked into high gear and remains a focus of investors.

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Stocks were wavering Wednesday after U.S. indexes notched their best performance in more than a month in the last session, with investor attention squarely focused on U.S. corporate earnings.

Futures for the Dow Jones Industrial Average retreated 50 points, or 0.1%, after the index surged 499 points on Tuesday to close at 34,911. S&P 500 futures signaled a start 0.2% lower with the Nasdaq on track to slip 0.5%; the S&P 500 and Nasdaq rallied 1.6% and 2.2% on Tuesday, respectively. The major indexes saw their best day since mid-March as investors appeared to buy the dip.

Overseas, the pan-European Stoxx 600 was 0.3% higher, and the Shanghai Composite lost 1.4% after the Chinese central bank surprised traders—who were expecting more stimulus—by leaving a key lending rate unchanged.

U.S. corporate earnings season has kicked into high gear and remains in the spotlight. Investors are focused on how well companies are weathering a complex macroeconomic environment, amid historically high inflation and expectations that the Federal Reserve will soon tighten monetary policy and ratchet up borrowing costs.

Procter & Gamble (ticker: PG), United Airlines (UAL), and Tesla (TSLA) are among the companies reporting results Wednesday.

“The U.S. first-quarter earnings season, which continues this week, looks set to be positive, and we forecast earnings per share growth of 10% for 2022 overall and 7% for 2023,” said Mark Haefele, the chief investment officer at UBS Global Wealth Management.

Netflix (NFLX) saw its shares plunge around 25%, after the streaming group reported weak results and a downbeat outlook late Tuesday, ramping up the pressure on other high-profile stocks, such as Tesla .

“Thankfully, U.S. earnings season has been relatively trouble-free, Netflix aside. It faces another challenge tonight though as Tesla releases results,” said Jeffrey Halley, an analyst at broker Oanda. “Tesla likely has a bit more leeway [than Netflix] as an ‘energy-transition’ stock, but weak results will likely stop any broader equity recovery in its tracks.”

Bond yields slipped back from multiyear highs, with the yield on the benchmark 10-year U.S. Treasury note down to 2.57% after topping 2.9% on Tuesday. 

That takes some of the pressure off stocks, which have been hammered by rising yields as the bond market prices in many interest-rate increases from the Fed this year, as well as a reduction in the central bank’s bondholdings.

Write to Jack Denton at jack.denton@dowjones.com