The major U.S. index futures are currently pointing to a lower open on Wednesday, with stocks likely to move back to the downside after recovering from early weakness to end the previous session roughly flat.

The downward momentum on Wall Street comes amid a continued increase by treasury yields, which have moved sharply higher over the past few sessions.

The ten-year yield has risen to its highest level in almost three months amid worries the Federal Reserve will lower interest rates slower than previously anticipated.

After the Fed slashed interest rates by 50 basis points last month, CME Group’s FedWatch Tool is currently indicating a 91.0 percent chance of just a 25 basis point rate cut next month.

A steep drop by shares of McDonald’s (NYSE:MCD) is likely to weigh on the Dow, with the fast food giant plunging by 6.8 percent in pre-market trading.

McDonald’s is under pressure after the Center for Disease control said a severe E. coli outbreak in Mountain West states has been linked to the chain’s Quarter Pounders.

Coffee giant Starbucks (NASDAQ:SBUX) is also seeing significant pre-market weakness after reporting a decrease in fiscal fourth quarter sales and suspending its guidance for fiscal year 2025.

Meanwhile, shares of AT&T (NYSE:T) are likely to see initial strength after the telecom giant reported better than expected third quarter earnings.

After coming under pressure early in the session, stocks regained ground over the course of the trading day on Tuesday. The major averages climbed well off their worst levels of the day before ending the day little changed.

The major averages moved to the downside going into the close, finishing narrowly mixed. While the Nasdaq rose 33.12 points or 0.2 percent to 18,573.13, the Dow edged down 6.71 points or less than a tenth of a percent to 42,924.89 and the S&P 500 slipped 2.78 points or 0.1 percent to 5,851.20.

The early weakness on Wall Street partly reflected renewed concerns about the outlook for interest rates following a recent surge by U.S. treasury yields.

Treasury yields have moved notably higher in recent days amid worries about the U.S. fiscal deficit and comments from Federal Reserve officials hinting at gradual rate cuts.

The subsequent recovery by the markets came even though the yield on the benchmark ten-year note crept up to a nearly three-month closing high, as traders remain optimistic about the economic outlook

A steep drop by shares of Verizon (NYSE:VZ) contributed to the dip by the Dow, with the telecom giant tumbling by 5.0 percent on the day.

The slump by Verizon came after the company reported third quarter earnings that beat analyst estimates but weaker than expected revenues.

Fellow Dow component 3M (NYSE:MMM) also moved to the downside even though the industrial conglomerate reported third quarter earnings that exceeded expectations.

On the other hand, shares of General Motors (NYSE:GM) spiked by 9.8 percent after the auto giant reported better than expected third quarter results.

Housing stocks moved sharply lower amid concerns about the outlook for interest rates, resulting in a 3.1 percent plunge by the Philadelphia Housing Sector Index. The index pulled back further off the record closing high set last Friday.

Substantial weakness was also visible among computer hardware stocks, as reflected by the 2.3 percent slump by the NYSE Arca Computer Hardware Index.

Logitech (NASDAQ:LOGI) helped lead the sector lower, with the computer accessories maker plummeting by 8.5 percent despite reporting better than expected fiscal second quarter results.

Telecom and airline stocks also saw notable weakness on the day, while tobacco and gold stocks showed significant moves to the upside.