U.S. stock futures were steady in overnight trading on Tuesday after the major averages clawed back much of their losses from Monday’s sell-off.

Dow futures rose 25 points. S&P 500 futures gained 0.1% and Nasdaq 100 futures rose 0.08%.

Netflix reported disappointing third quarter subscriber guidance after the bell on Tuesday, but the stock was flat in extended trading. The streaming giant said it expects 3.5 million net subscribers in the third quarter, nearly 2 million below analysts’ estimates. The company also reported earnings that missed expectations.

Meanwhile, shares of Chipotle rose 4% in after hours trading as the Mexican fast-food reported quarterly revenue that surpassed pre-pandemic levels as dine-in customers returned to its restaurants.

On Tuesday, stocks rebounded sharply from Monday’s sell-off triggered by a Covid-inspired global growth scare. After its worth day in 8 months on Monday, the Dow Jones Industrial Average rallied nearly 550 points or 1.6%. It was the biggest jump for the Dow in more than a month.

The S&P 500 registered a gain of 1.5%. The Nasdaq Composite rose 1.6%.

The small-cap benchmark Russell 2000 surged 3% as reopening plays popped. American Airlines rose 8.4% and Norwegian Cruise Line rose 8.3%.

Bond yields also rebounded with the U.S. 10-year stabilizing around 1.2%, after falling it its lowest level in 5 months on Monday.

“Until the 10-year yield rises back above 1.3% and stays above that level for a few days, today’s stock market rally is likely tentative,” said Jim Paulsen, chief investment strategist at the Leuthold Group.

Some strategists see the market heading into a volatile period, in which there could be a deeper pullback. Investors are juggling inflation concerns as well as new Covid cases are rebounding in the U.S. as the delta variant spreads.

“I think what we’ve seen here are the early warning shots of a correction that we’ll see probably… in late August, September, October,” said Matt Maley, equity strategist at Miller Tabak. 

Earnings season continues on Wednesday with key reporting from Coca-Cola, Johnson & Johnson, Verizon, CSX, Las Vegas Sands and Texas Instruments. About 85% of S&P 500 companies that have reported so far have beaten estimates, according to FactSet.

— with reporting from CNBC’s Patti Domm.