Wall Street indexes were heading in the right direction to open lower on Friday after data showed U.S. economic growth slowed greater than expected within the fourth quarter, while inflation picked up in December.
U.S. gross domestic product increased at a 1.4 per cent annualized rate last quarter, the Commerce Department’s Bureau of Economic Evaluation said in its advance estimate of fourth-quarter GDP, much below economists’ forecast for GDP rising at three per cent.
GDP growth was hurt by disruptions from last 12 months’s record government shutdown and moderating consumer spending.
A separate report showed underlying U.S. inflation increased greater than expected in December, with indications of further acceleration in January. The Personal Consumption Expenditure index, the U.S. Federal Reserve’s preferred inflation gauge, rose 0.4 per cent in December on a month-over-month basis, in comparison with economists’ estimate of a 0.3 per cent rise.
Traders stuck to bets the Fed will probably deliver its next interest-rate cut in June after the info.
“(A) combination of somewhat bit lower growth than we were in search of within the GDP release and somewhat bit higher inflation than we were anticipating within the PCE – that’s generally not a superb combination for the stock market,” said Steve Wyett, chief investment strategist at BOK Financial.
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“We don’t think the Fed must be aggressive of their rate cuts. So on balance, this data that we got today still matches inside that narrative.”
S&P Global’s business activity survey and the University of Michigan’s consumer sentiment data are due later within the day.
Investors were also waiting for a possible U.S. Supreme Court ruling on U.S. President Donald Trump’s tariffs that may very well be handed down at 10:00 a.m. eastern time. In the event that they are struck down, there’s a risk that greater than USD$175 billion in U.S. tariff collections will must be refunded, based on Penn-Wharton Budget Model economists.
At 8:56 a.m. eastern time, S&P 500 e-minis fell 19.25 points, or 0.28 per cent, Nasdaq 100 E-minis dropped 105.75 points, or 0.43 per cent, and Dow E-minis 107 lost points, or 0.22 per cent.
Private capital firm Blue Owl Capital
shed 1.8 per cent in premarket trading, after falling 5.9 per cent within the last session, when the corporate’s latest technique to return capital from a small debt fund and permanently halt redemptions at one in every of the funds rattled investors and dragged peers down.
Other private equity firms including KKR & Co and Apollo Global Management also fell one per cent each.
Technology stocks have been pressured in recent months due concerns over high valuations and limited evidence that massive investments in AI were paying off. Sectors starting from software to real estate were hammered last week by concerns that latest AI models could upend their business models.
Oil prices dropped from six-month highs as investors assessed the fallout from growing tensions between Washington and Tehran, with Trump warning Iran it must make a deal over its nuclear program or “really bad things” would occur.
Energy stocks including Exxon Mobil and Chevron were barely lower after rising within the previous session.
Akamai Technologies slid 7.4 per cent after the cloud company forecast first-quarter adjusted profit below Wall Street estimates.
Copart lost 10.1 per cent after the web vehicle auction services provider posted a decline in second-quarter profit and revenue.