After big gains, Wall Street is expected to open lower.
THE KEY POINTS
Netflix improves based on predicted subscriber growth
Baker Hughes loses more money in a quarter.
Tesla will release its profits after the market closes.
Dow, S&P, and Nasdaq all saw declines in their respective futures, each by 0.34 percent.
After experiencing significant gains on Wall Street the previous session, U.S. stock indexes were poised to open lower on Wednesday as investors analysed company earnings reports for signs of how surging inflation would affect growth.
Despite reporting a 1 million-subscriber decline in the second quarter, Netflix Inc. (NFLX) forecasted it will resume customer growth during the third quarter, causing its shares to rise by 4.8 percent premarket.
The first big-tech company to release quarterly results was the streaming service provider, which gave rise to optimism that the sector as a whole would fare well in spite of the unstable global economy.
Following excellent corporate earnings, the S&P 500 (SPX500USD), Dow Jones Industrial Average (US30), and Nasdaq (IXIC) all increased by more than 2% on Tuesday.
According to Peter Cardillo, chief market economist at Spartan Capital Securities in New York, "futures were pointing to a higher opening trying to build on yesterday's strong rise, but they have now reversed down a little bit, so I assume there's some profit taking."
"I believe that this profit taking will be transient once the earnings come in, if we have a repeat of yesterday's (excellent set of earnings) results."
Although Friday's positive retail sales and consumer mood figures helped to allay some worries about the economy, concerns of a recession or a rapid downturn still exist as the U.S. Federal Reserve raises interest rates to control inflation.
Prior to some policymakers signalling a 75-basis-point increase, markets initially priced in a full 100-basis-point increase in interest rates at the Fed's forthcoming meeting next week.
According to Refinitiv statistics, analysts anticipate the overall year-over-year growth of the S&P 500 profit to be 5.8% this reporting season, down from the expectation of 6.8% at the beginning of the quarter.
Shares of Apple Inc. (APC) and Meta Platforms Inc. (META.O) both increased by 0.5 percent, while electric vehicle manufacturer Tesla Inc. (TSLA34) climbed 0.6 percent ahead of its earnings announcement following market closing.
S&P 500 e-minis (ESH2023) were down 12.75 points, or 0.32 percent, Nasdaq 100 e-minis (NQ1!) were down 27.5 points, or 0.22 percent, and Dow e-minis (YMZ2022) were down 107 points, or 0.34 percent, at 8:42 a.m. ET.
As the company's cancer treatment Keytruda failed to achieve the primary objective of a late-stage trial assessing it in patients with head and neck cancer, Merck & Co Inc (MRK) saw a 0.8 percent decline.
Baker Hughes Co (68V) slumped 5.8 percent after the oilfield services provider announced a greater second-quarter loss, but its adjusted earnings again missed analysts' projections.