The Federal Reserve is expected to keep interest rates higher for longer, which led to an increase in Treasury yields on Wednesday. A decline in Netflix and Tesla (NASDAQ:TSLA) shares was also expected to drag down the tech-heavy Nasdaq.

The electric vehicle manufacturer reduced pricing on certain of its Model Y and Model 3 vehicles in the United States, the sixth time it has done so this year, which caused Tesla Inc to fall 2.8% in premarket trade.

The company is due to report January-March quarter results after the closing bell on Wednesday.

Netflix Inc (NASDAQ:NFLX) fell 1.6% after the pioneer in video streaming topped Wall Street earnings projections for the first quarter but provided a pessimistic outlook.

Tuesday saw the benchmark S&P 500 reach a more than two-month high as gains in some significant technology firms offset weak quarterly results from Johnson & Johnson (NYSE:JNJ) and Goldman Sachs (NYSE:GS).

Some companies releasing earnings before the opening bell include Wall Street bank Morgan Stanley (NYSE:MS), regional lender U.S. Bancorp, oilfield services provider Baker Hughes, and healthcare provider Abbott.

Even though the start of earnings season has been mostly positive for stocks, investors will be keenly monitoring reports from market leaders and consumer companies for indications of inflation and a slowdown in the economy that could harm margins.

Recent mixed economic data increased the likelihood that the U.S. central bank will raise interest rates by 25 basis points in May. Traders estimate odds of about 85%, according to CME Group’s (NASDAQ:CME) Fedwatch tool.

On Wednesday, as traders reduced their expectations of rate reduction later this year, the 2-year Treasury yield, which best reflects expectations for short-term rates, touched a one-month high of 4.27% and the 10-year yield reached a four-week high.

Investors will closely watch the release of the Federal Reserve’s “Beige Book” at 2:00 p.m. ET (1800 GMT), which provides a snapshot of the state of the U.S. economy. Later in the day, Fed Governor Michelle Bowman is scheduled to speak.

The Dow e-minis were down 165 points, or 0.48%, the S&P 500 e-minis were down 25.5 points, or 0.61%, and the Nasdaq 100 e-minis were down 120.75 points, or 0.92%, as of 05:49 a.m. ET.

Western Alliance (NYSE:WAL) Bancorp rallied 15.5% after the regional bank posted stronger-than-expected earnings and said its deposits had stabilized after the March banking crisis.

In premarket trading, shares of the financial institutions First Republic Bank (NYSE:FRC), Zions Bancorporation (NASDAQ:ZION), and Pacwest Bancorp (NASDAQ:PACW) increased by between 1.1% and 4.1%.