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U.S. stock futures trimmed earlier declines, though still pointed to a mostly lower open, as investors kept an eye on the 10-year Treasury yields as it climbed above 3%.
Investors digested a slew of earnings report, including results from Twitter, Comcast and Boeing rolling in before the market open.
What are stock futures doing?
On Tuesday, U.S. stocks tumbled across the board after the yield on benchmark 10-year government notes TMUBMUSD10Y, +0.60% briefly touched the psychologically important 3% level for the first time since early 2014. The Dow industrials DJIA, -1.74% ended 1.7% lower, the S&P 500 SPX, -1.34% fell 1.3%, and the Nasdaq Composite Index COMP, -1.70% slid 1.7%.
What is driving the market?
Once again, the moves in the bond market were influencing trade in U.S. stocks on Wednesday, as Treasury yields continued to step higher. The yield on 10-year paper climbed 3 basis points to 3.021%.
Higher yields can weigh on stocks, as bonds start to offer better returns than equities and push up borrowing costs for companies.
Earnings season remains in focus, with high-profile companies such as Twitter Inc. and Boeing Co. issuing reports ahead of the bell. Names such as Facebook Inc., Qualcomm Inc. and Visa Inc. are due once trading closes.
So far, more than 80% of the S&P 500 companies with reports out have beaten profit forecasts. However, those better-than-expected results often haven’t been enough to give shares a lift.
There are no major economic data reports or Federal Reserve speakers scheduled today.
What are strategists saying?
“Major U.S. equity indices recorded a considerable drop on Tuesday, as warnings by perceived-bellwether companies—perhaps most notably Caterpillar—of higher costs on the back of rising yields weighed on equity market sentiment,” said Andreas Georgiou, investment analyst at XM, in a note.
“It would be interesting to see to what extent this narrative plays out today, diverting to some extent the attention from corporate releases and into the bigger picture for the stock market. How Treasury yields evolve today, and in the days to come, can also add fuel or remove steam out of this story,” he added.
What stocks are in focus?
Comcast Corp. CMCSA, -1.54% slipped 2.9% after a flurry of news for the company. The company reported a stronger-than-expected rise in revenue and launched a formal bid for Sky SKY, +3.40% Comcast set out of the terms of a £22 billion ($30.72 billion) preconditional offer for U.K. broadcaster, trumping an offer from 21st Century Fox Inc. FOX, -1.42%
After the market closes, AT&T Inc. T, +0.32% Visa Inc. V, -2.56% Qualcomm Inc. QCOM, -1.17% Facebook Inc. FB, -3.71% eBay Inc. EBAY, -1.01% PayPal Holdings Inc. PYPL, -3.75% and Ford Motor Co. F, -0.72% are among companies slated to report.