U.S. stock futures fall as investors brace for big earnings and bond yields resume a climb upward

The S&P 500 and Nasdaq each saw the second straight weeks of losses, down 2.1% and 2.6%, respectively, while the Dow fell 0.8% in a third-straight weekly drop.

Read: Recession fears and the stock market — is it too late to play defense?

What’s driving the markets?

Stock futures began tilting lower on Sunday, led by Nasdaq-100 futures as bond yields continued to climb across the curve. The yield on the 10-year Treasury note TMUBMUSD10Y, 2.866% rose 4 basis points to 2.864%, while that of the 2-year note TMUBMUSD02Y, 2.493% rose 4 b asis points to 2.488%.

Investors remain concerned about rising inflation and how that may weigh on the economy, as the Federal Reserve struggles to keep a lid on rising prices. Goldman Sachs’s chief economist Jan Hatzius and his team predicted the U.S. economy faces a 35% chance of recession in the next two years, and 15% over the next year.

See: Recession fears and the stock market — Is it too late to play defense?

“The main challenge for the Fed will be to reduce the jobs-workers gap and slow wage growth to a pace consistent with its inflation goal by tightening financial conditions enough to reduce job openings without sharply raising unemployment,” said Hatzius in a note dated Sunday, as he added that “history suggests this may be challenging.”

The National Association of Home Builder’ April index will be released at 10 a.m. Eastern. Comments are expected from St. Louis Fed President James Bullard later in the day.

China’s economy expanded 4.8% annually in the first quarter, which beat expectations. That still puts the country behind scheduled to reach an official target of 5.5% growth this year, with fresh COVID outbreaks not helping.

Earnings will be in focus for Monday as well, with Bank of America BAC, -3.22% due ahead of the open on Monday, Netflix Inc.  NFLX, -2.65% on Tuesday afternoon and Tesla Inc.  TSLA, -3.66%  on Wednesday afternoon. Eyes will also be on Twitter Inc.  TWTR, -1.68%,  which on Friday adopted a “poison pill” in the face of a takeover bid announced earlier in the week by Elon Musk. Those shares rose 2% in premarket trading.

A number of major banks, including Goldman Sachs Group Inc. GS, -0.10%,  Morgan Stanley  MS, +0.75%  and Wells Fargo & Co.  WFC, -4.51%,  reported earnings last week, to mixed results.

Didi Global DIDI, -3.15% shares tumbled 17% in premarket trading. The China ride-share giant, which is being investigated in its home country, said over the weekend that it will hold an extraordinary general meeting on May 23 to vote on a planned delisting from the New York Stock Exchange. The company reported a fall in fourth-quarter earnings.

Crude prices were declining, but natural-gas futures NGK22, +2.55% shot higher, up nearly 3% to $7.512 per million British thermal units to a level not seen in around 14 years.

Read: U.S. natural gas is trading at an ‘insane’ price — Here’s why it just hit a nearly 14-year high

— Mike Murphy contributed to this article