U.S. stock futures gave up gains from earlier in the day Wednesday, even after the release of strong quarterly results from Netflix.
Dow Jones Industrial Average futures were down 120 points, or 0.4%. S&P 500 and Nasdaq 100 futures traded lower by 0.5% each.
Netflix shares rallied 13% after the streaming giant posted earnings and revenue that beat estimates as well as strong subscriber growth for the third quarter. Other tech-related names such as Meta, Amazon and Microsoft traded higher in the premarket.
Those results come as some on Wall Street reset their earnings projections lower as investors worry about a recession. Gene Goldman, chief investment officer at Cetera Investment Management, said that while an economic recession could be mild, the market could struggle with those downward revisions.
“Earnings estimates are a bit too high for the S&P 500 at 7% to 9% per year going forward,” he said. “Slowing economic growth and Fed rate hikes will likely put downward pressure on earnings. Because earnings drive stock prices, they could pressure markets for some time.”
Tech earnings will be in full swing next week, but IBM and Tesla are on deck to report Wednesday. Social media firm Snap will report later in the week.
In economic data, investors are looking forward to 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 come out as well.
Wednesday’s moves came after another strong day for stocks, with the Dow rallying about 337 points Tuesday and the S&P 500 gaining 1.1%.