Dow futures drop more than 200 points on Wednesday: Live updates

Stock futures slid on Wednesday, as traders kept an eye on Treasury yields with inflation concerns simmering.

Futures tied to the Dow Jones Industrial Average fell by 237 points, or 0.6%. S&P 500 futures slipped 0.6%, while Nasdaq 100 futures lost 0.7%.

Nvidia shares rose slightly in premarket trading, extending gains since its earnings last week. Over the three trading days after the report was released, Nvidia surged roughly 20%. It was one of few bright spots in megacap tech before the bell, with Tesla, Alphabet and Microsoft and Meta all in the red.

Outside of tech, American Airlines tumbled more than 8% in the premarket after slashing its sales outlook for the second quarter. Southwest Airlines dipped about 3% in sympathy. On the other hand, Dick’s Sporting Goods jumped more than 7% on the back of strong earnings and raised guidance.

Wednesday’s move lower in futures comes as the 10-year Treasury note yield ticked higher for a second day, last trading above 4.57%. On Tuesday, the benchmark yield popped above 4.5% — a troublesome level for stock investors — following a Treasury Department auction that was met with weak demand.

“Stocks are getting hit in most major markets as the poor US price action from Tues carries over into Wednesday,” Adam Crisafulli of Vital Knowledge wrote. “The narrative is starting to splinter a bit, with the macro conversation worried about a reacceleration of inflation … while certain industries grapple with the EPS implications of disinflation/deflation.”

That follows after a mixed start to the week. The Dow dropped more than 200 points on Tuesday following the move higher in yields. The S&P 500 closed around its flatline, while the Nasdaq Composite reached a record above 17,000 thanks to strong gains in Nvidia.

The major averages are on track to close the month with impressive gains, partly propped up by enthusiasm about a better-than-expected quarterly earnings season. The S&P 500 is up 5.4% this month, while the Dow has advanced 2.7%. The Nasdaq has climbed 8.7% in May.

The advances arrive even as traders have lowered their expectations for Federal Reserve rate cuts. Indeed, fed funds futures trading data suggests a nearly 54% chance that rates will hold steady in September, according to the CME FedWatch Tool.