Wall Street is drifting toward the close of its worst month since April, and U.S. stock indexes are mixed following an economic report highlighting both encouraging and discouraging trends.
The S&P 500 was down 0.1% in early trading. It’s fallen in five of the last six days, which erased its gain for the year so far, after weaker-than-expected reports on the economy and worries about President Donald Trump’s tariffs knocked the index of its all-time high set last week.
The Dow Jones Industrial Average was up 51 points, or 0.1%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 0.5% lower.
Much of the damage has focused on what had been the market’s biggest winners in recent years, whose momentum seemed nearly impossible to stop at times. Stocks that flew in the frenzy around artificial-intelligence technology have slumped sharply, for example, and Nvidia fell another 1.1% following its 8.5% tumble on Thursday. Bitcoin, meanwhile, has dropped more than 20% from its record.
The latest report on the U.S. economy released Friday included some encouraging news for the market: Inflation across the country decelerated a bit and behaved pretty much exactly as economists expected, according to the measure that the Federal Reserve prefers to use.
But it also said that U.S. households pulled back on their spending during January. That’s dangerous for an economy that’s depended in large part on strong spending by them to keep it out of a recession.
U.S. consumers had already given big hints that they’re under pressure and worried. Inflation is still high, even if it’s not as bad as its peak from 2022, and a widespread worry is that tariffs announced by Trump could push prices for the cost of living even higher.
Wall Street hopes that all the talk about tariffs has been merely a tool Trump is using to negotiate with other countries and that he’ll ultimately pull back on them, which would mean less pain for the global economy than initially feared.
But even if that proves to be the case, recent reports have shown that all the talk has already pushed U.S. consumers to brace for much higher inflation in the future. At some point, such worries could drive their behavior, which could hurt the economy even without tariffs.
All the uncertainty around not only tariffs but also deregulation and other potential policies could mean that “if the market doesn’t see Trump moving towards more market-friendly policies, the level of trust could continue eroding,” Bank of America economists wrote in a BofA Global Research report.
The S&P 500 has already lost most of the bounce it received after Trump’s election in November.
Of course, much of January’s drop in spending by U.S. households, which was the worst in four years, could have been because of painfully cold weather around the country and other anomalies. But it also followed several signals of potentially weakening growth for the U.S. economy, which closed 2024 running at a solid pace.
“Consumer spending’s unexpectedly sharp decline at the start of the year, likely overstated by its strong finish to 2024, nonetheless is consistent with other data signaling a shift to more sustainable growth by the economy,” said Gary Schlossberg, market strategist at Wells Fargo Investment Institute.
In the bond market, Treasury yields edged back. The yield on the 10-year Treasury fell to 4.24% from 4.26% late Thursday. It’s down sharply from last month, when it was approaching 4.80%, as worries have grown about where the U.S. economy is heading.
In stock markets abroad, indexes fell sharply in Asia as worries about tariffs continued.
China’s Commerce Ministry issued a statement Friday protesting Trump’s decision to double tariffs on Chinese products to 20%, saying it violated international trade rules and would add to the “burden on American companies and consumers and undermine the stability of the global industrial chain.”
Indexes tumbled 3.3% in Hong Kong, 2% in Shanghai, 3.4% in Seoul and 2.9% in Tokyo.
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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.
Wall Street is drifting toward the close of its worst month since April following an economic report highlighting both encouraging and discouraging trends.
BANGKOK – Wall Street is having a small rebound before the opening bell Friday but remains on track for another dismal week of losses as investors try to anticipate what President Donald Trump’s tariffs mean for markets and the broader economy.
Futures for the S&P 500 inched up 0.2%, while futures for the Dow Jones Industrial Average rose 0.4%. The S&P 500 has lost 2.5% this week on top of the previous week’s 1.7% drop.
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The S&P 500 has fallen five out of the past six trading sessions after setting an all-time high last week. Concerns about the U.S. economic outlook have been behind much of the drop, including worries over how tariffs could worsen inflation and mass layoffs of government workers could increase unemployment.
The tech-heavy Nasdaq, which slumped 5% this week, is up less than 0.1% before the bell.
Nvidia slipped 1% before the bell following its 8% decline a day earlier, even as the chipmaker reported strong earnings and raised guidance. Sky-high expectations for the darling of artificial intelligence prompted investors to collect profits this week.
Between Thursday and premarket trading on Friday, Super Micro Computer more than gave back its gains from earlier in the week when it announced it had finally filed the required financial reports required to remain listed on the Nasdaq. Its shares were down 6.5% in premarket trading following Thursday’s 16% tumble.
Tesla shares were off less than 1% early Friday, continuing its string of losses that trimmed the value of the electric car maker’s shares by 17% this week alone.
Some industry analysts suspect that sagging European sales — along with CEO Elon Musk’s embrace of far-right politics around the globe — has repelled a significant chunk of potential Tesla buyers. Earlier this week, Tesla’s market cap dipped below $1 trillion.
Coming later Friday morning is the U.S. government’s latest consumer spending report, which contains the Federal Reserve’s preferred measure of inflation.
On Thursday, Trump reiterated that his administration’s proposed tariffs on Canadian and Mexican imports would go into effect as scheduled on March 4.
China’s Commerce Ministry issued a statement Friday protesting Trump’s decision to double tariffs on Chinese products to 20%, saying it violated international trade rules and would add to the “burden on American companies and consumers and undermine the stability of the global industrial chain.”
Shares retreated Friday in Asia, with benchmarks in Japan, Hong Kong and South Korea tumbling more than 2%.
Tokyo’s Nikkei 225 index lost 2.9% to 37,155.50, pulled lower by plunging prices for shares in technology companies. Computer chip test equipment maker Advantest sank 8.8%, Disco Corp., another equipment maker, lost 10.3% and Tokyo Electron shed 4.5%.
Hong Kong’s Hang Seng index dropped 3.3% to 22,941.32, while the Shanghai Composite index lost 2% to 3,320.90.
South Korea’s Kospi gave up 3.4% to 2,532.78. In Australia, the S&P/ASX 200 shed 1.2% to 8,172.40.
In Europe at midday, Germany’s DAX fell 0.5%, while the CAC 40 in Paris gave up 0.4%. Britain’s FTSE 100 rose 0.4%.