Stock futures fall slightly following 400-point rally in the Dow

Traders react on the floor of the New York Stock Exchange (NYSE) as a screen shows Federal Reserve Board Chairman Jerome Powell during a news conference following a Fed rate announcement, in New York City, July 27, 2022.

Brendan Mcdermid | Reuters

Stock futures inched downward Wednesday evening after the major averages snapped a two-day slide, helped by robust earnings and stronger economic reports for June and July that led investors to look past the possibility of a recession .

Futures tied to the Dow Jones Industrial Average fell 23 points or 0.07%. S&P 500 futures slipped by 0.1% and Nasdaq 100 futures lost 0.2%.

In regular hours trading, all three major averages ended the day on higher. The Dow advanced by more than 400 points, while the S&P 500 hit its highest level since June. The tech-heavy Nasdaq Composite jumped about 2.5%.

Investors got the green light to jump back into beaten up tech names after a surprise rebound in July services PMI and comments from St. Louis Federal Reserve President James Bullard. Bullard said he does not think the U.S. is in a recession, citing job gains and low unemployment.

“U.S.-China tensions remain high and the Fed continues to talk tough on inflation, but earnings were enough to catalyze the next leg of the rebound,” according to Barclays. “A wave of Tech quarterlies came in better than expected, and the [technology, media and entertainment, and telecommunications] complex led the S&P 500 to a new QTD high.”

Investors will get another batch of earnings on Thursday. Eli Lilly, Kellogg, Alibaba and ConocoPhillips are among those scheduled to report quarterly results before the bell.

In economic data, investors are looking forward to weekly jobless claims in the morning. Federal Reserve Bank of Cleveland President Loretta Mester speaks at the Economic Club of Pittsburgh.

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