Stocks are set to bounce slightly after better-than-expected earnings. Dow futures up 65 points

U.S. stock futures were slightly higher early Wednesday following a sell-off on Wall Street triggered by surging bond yields.

Dow futures rose 65 points after being down by more than 200 earlier. S&P 500 were up 0.26% while Nasdaq 100 futures rose 0.4%.

Shares of Sony tumbled in premarket trading, falling 4.7% the day after Microsoft said it is buying video game publisher Activision Blizzard for nearly $69 billion. Sony’s PlayStation competes with Microsoft’s Xbox consoles. The drop in Sony’s stock comes after shares slid 7.2% on Tuesday.

In early earnings results, Bank of America beat Wall Street estimates as it released pandemic-related loan loss reserves. Shares rebounded more than 2%, a day after sliding 3.4%.

Home builders also were broadly lower in early trading following after KeyBanc downgraded the group on concerns over looming interest rate hikes that will drive up borrowing costs.

U.S. futures broadly moved higher Wednesday even though government bond yields again were slightly higher, with the 2-year note rising to 1.06% and the benchmark 10-year Treasury near 1.89%.

On Tuesday, the Dow Jones Industrial Average lost more than 540 points, dragged down by a 7% drop in Goldman Sachs. The Wall Street bank missed analysts’ expectations for earnings as operating expenses surged 23%. Its shares recovered slightly in the premarket, up nearly 0.5% after lopping 170 points from the bluechip index Tuesday.

The S&P 500 declined 1.8%. The Nasdaq Composite, full of interest rate sensitive technology stocks, was the relative underperformer, dipping 2.6%. The Nasdaq closed at its lowest level in three months as investors feared how quickly the Federal Reserve will hike interest rates.

Bond yields continued their year-to-date climb on Tuesday with the 10-year Treasury topping 1.87%, its highest level in 2 years. The 10-year yield started the year around 1.5%. Meanwhile, the 2-year rate — which reflect short-term interest rate expectations — topped 1% for the first time in two years.

The move, which comes after a market holiday in the U.S. Monday, indicates that investors are preparing for the possibility of more aggressive tightening by the Federal Reserve.

The “2-year yield breaking above 1% is the bond market saying it agrees with the Fed that more aggressive hikes are coming,” said Ryan Detrick of LPL Financial. “Add those worries with crude flirting with $85 a barrel and stubbornly high inflation, and we have a perfect cocktail for a risk-off day.”

The S&P 500 ended the day nearly on top of its 100-day moving average. Jim Paulsen, chief investment strategist at the Leuthold Group, said traders will be watching if the index holds this level or breaks lower.

“With a light economic calendar this week, all eyes will be on key technical support levels, earnings reports and whether bond yields keep surging toward 2% or finally take a breather,” said Paulsen.

In other earnings news, Morgan Stanley also is slated before the bell.

Of the 33 S&P 500 companies that have reported quarterly results, nearly 70% have topped Wall Street’s expectations.

Procter & Gamble, U.S. Bancorp, UnitedHealth and United Airlines also report quarterly earnings on Wednesday.