Dow futures lead S&P 500, Nasdaq lower as Treasury yields tick up

The Dow led US stock futures lower on Wednesday, as doubts about rate cuts weighed on investors getting ready for a busy day of earnings highlighted by Boeing (BA) and Tesla (TSLA).

Dow Jones Industrial Average futures (YM=F) fell 0.4%, while S&P 500 futures (ES=F) edged down 0.2% after the benchmark booked back-to-back losses for the first time since September. Contracts on the tech-heavy Nasdaq 100 (NQ=F) slid almost 0.4%.

The rally in stocks has stalled as investors debate how quickly the Federal Reserve will cut interest rates over the next year. Gloom about the prospect of rates staying higher for longer has dragged on bond prices in recent days, sending the 10-year Treasury yield (^TNX) to levels not seen since July. The yield rose slightly on Wednesday to almost 4.3%.

Read more: What the Fed rate cut means for bank accounts, CDs, loans, and credit cards

Meanwhile, the wait is on for Boeing and Tesla results as both struggle with headwinds. The planemaker is expected to post a big loss in its quarterly report before the bell, on the same day it will find out whether striking factory workers have voted to accept a pay deal.

Tesla’s earnings, due after the market close, are in high focus amid questions about the EV maker’s long-awaited cheaper EV, robotaxi specifics, and its AI shift. More broadly, Wall Street is looking to divine whether Big Tech megacaps will keep fueling the stock rally — and what the AI arms race means for their performance.

Coca-Cola (KO), AT&T (T), and IBM (IBM) are other top-tier names on the packed earnings docket, with more than one quarter of reports in the bag.

Investors are on the alert for surprises after Starbucks’s (SBUX) shock sales drop and withdrawal of guidance. Shares in the coffee chain fell almost 5% in premarket.

Elsewhere on the corporate front, McDonald’s (MCD) stock sank as much as 10% after the company’s quarter pounder burgers were officially linked to an E. coli outbreak in some states. Shares recouped some losses early Wednesday, down around 7%.