Read: The man who seized one of Argentina’s ships now warns there will be a wave of emerging-market defaults

What’s driving the market?

Investors are waiting to see if last week’s bounce for stocks will hold, after losses on Tuesday amid higher Treasury yields and oil prices. The yield on the 10-year Treasury 
TMUBMUSD10Y,
2.880%
 note rose 5 basis points to 2.876% on Wednesday, according to Dow Jones Market Data.

U.S. crude oil prices
CL.1,
+0.58%
were up another 1.3% to $116.21 a barrel and international benchmark Brent
BRN00,
+0.80%
rose 1.5% to $117.34. Oil prices rose Tuesday after the EU slapped new sanctions on Russian crude, but pulled back after The Wall Street Journal reported some members of the OPEC were considering suspending Russia from oil-production targets.

U.S. economic data will swing into focus Wednesday with a May update on the Institute for Supply Management’s manufacturing index due at 10 a.m. ET, along with the S&P Global final reading of its purchasing managers’ index for the manufacturing sector. St. Louis Fed President James Bullard is due to speak at 1 p.m. ET and the Fed will publish its Beige Book on economic conditions later in the session.

“The pressure on the equity markets may pick back up, somewhat ironically, if US data through Friday’s May jobs report, and the May ISM Services suggest that U.S. growth is humming along at a solid clip, taking US yields back toward cycle highs,” said a team of strategists at Saxo Bank, in a note to clients.

As well, investors will be keeping an eye on the liquidity impact of shrinking of the Fed’s massive balance sheet, which starts Wednesday and is aimed in part at helping fight high inflation.

“Uncertainty on the impacts of Fed QT that kicks off today and ramps up to full force over the next three months to a pace of $95 billion/month could also prove a factor weighing on sentiment,” added the Saxo Bank strategists.

Read: Fed’s quantitative tightening is about to arrive: What that might mean for markets

U.S. Treasury Secretary Janet Yellen admitted in an interview Tuesday that she was “wrong” last year in believing U.S. inflation would not pose a long-term problem, but President Joe Biden said he would leave it to the Fed to solve the inflation problem.

Elsewhere, Atlanta Fed President Raphael Bostic told MarketWatch in an exclusive interview on Tuesday that any September “pause” in the central bank’s push to raise interest rates shouldn’t be construed as a “Fed put,” or sign that the central bank will come to the rescue of markets.

Earnings reports after the market close are expected from meme stock GameStop Corp.
GME,
-9.09%,
pet products retailer Chewy Inc.
CHWY,
-8.52%,
and on the tech side, NetApp Inc.
NTAP,
-1.51%
and Hewlett Packard Enterprise Co.
HPE,
-1.20%

What companies are in focus?

• Salesforce Inc. stock
  CRM,
  -2.94%
  jumped 9% in premarket trading after the cloud-based customer-relationship-management company hiked its earnings forecasts.

• Capri Holdings Ltd.
  CPRI,
  +2.46%
  stock rose 2.6% after the luxury fashion company reported a big earnings beat and $1 billion buyback program.

How are other assets trading?

• The ICE U.S. Dollar Index 
  DXY,
  +0.29%,
   a measure of the currency against a basket of six major rivals, was up 0.2%.

• Bitcoin BTCUSD, -0.81% was trading about 1.1% lower at $31,443.

• Gold for August delivery fell 0.8% to $1,832.80 an ounce.

• In European equities, the Stoxx Europe 600 
  SXXP,
  -0.30%
  fell 0.3% and London’s FTSE 100 
  UKX,
  -0.20%
  slipped 0.1%.

• In Asia, the Shanghai Composite 
  SHCOMP,
  -0.13%
  closed down 0.1%, the Hang Seng Index 
  HSI,
  -0.56%
  fell 0.5% in Hong Kong, and Japan’s Nikkei 225 
  NIK,
  +0.65%
  rose 0.6%.