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

US stock futures gave up gains made earlier Wednesday, even after strong quarterly results from Netflix.

Dow Jones Industrial Average futures were down 120 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.

The results come as some on Wall Street have readjusted their earnings forecasts back down as investors worry about a recession. Jane Goldman, chief investment officer at Cetera Investment Management, said that while the recession may be mild, the market could suffer from those downward revisions.

“Earnings estimates are a bit high for the S&P 500 at 7% to 9% annually going forward,” he said. “Slowing economic growth and Fed rate hikes are likely to put downward pressure on earnings. And because earnings are driving stock prices, they may pressure markets for some time.”

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%.

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