Stock futures fall slightly after a 400-point rally in the Dow Jones

Equity futures fell slightly on Wednesday evening after major two-day averages fell, helped by strong earnings and stronger economic reports for June and July that led investors to look beyond the possibility of a recession.

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

In normal trading hours, all three major averages ended the day higher. The Dow Jones rose 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 get back into battered tech names after a surprise rebound in the services PMI in July and comments from St. Louis Federal Reserve Chairman James Bullard. Bullard said he doesn’t believe the United States is in a recession, citing job gains and low unemployment.

“US-China tensions remain high and the Fed continues to talk tough on inflation, but earnings have been enough to catalyze the next stage of the rebound,” according to Barclays. “A wave of Tech Quarterly has arrived better than expected, and the [technology, media and entertainment, and telecommunications] complex drove the S&P 500 to a new QTD high.”

Investors will receive another batch of income on Thursday. Eli Lilly, Kellogg, Alibaba and ConocoPhillips are among those due to release their quarterly results before the bell.

In economic data, investors are eagerly awaiting 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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