On Friday, stock futures dipped after some important economic numbers were released. This comes just ahead of an expected Supreme Court decision regarding President Trump’s tariffs.
Futures for the Dow Jones Industrial Average fell by 136 points, or 0.3%. The S&P 500 and the Nasdaq-100 futures also dropped slightly, down 0.3% and 0.5%, respectively.
The latest data showed that the U.S. economy grew by only 1.4% in the fourth quarter. This was much lower than the 2.5% economists had predicted. In contrast, the economy expanded by 4.4% in the third quarter, exceeding expectations significantly.
Inflation is another area of concern. The personal consumption expenditures price index (PCE), which the Federal Reserve uses to measure inflation, indicated that prices held steady in December. Core PCE, which excludes food and energy, came in at 3%, matching forecasts.
The Federal Reserve is dealing with differing views among its policymakers. Some are focused on supporting the job market, while others worry more about inflation, which still exceeds the Fed’s 2% target. Minutes from the January meeting showed that some officials want more evidence of cooling inflation before they consider cutting interest rates again.
Investors are also waiting for a Supreme Court ruling on the legality of Trump’s tariffs. Many Wall Street analysts think that if the tariffs are deemed illegal, it could have a positive impact on the stock market. However, there are concerns that the administration might find other means to impose similar duties in the future. The court has more decision days scheduled for Tuesday and Wednesday.
Paul Stanley, chief investment officer at Granite Bay Wealth Management, noted, “The market is treading water right now waiting for its next catalyst.” He anticipates that the Supreme Court ruling, along with earnings reports from major players like Nvidia next week, could significantly influence the markets.
Despite recent fluctuations, the S&P 500 has mostly remained stable this year, while the Nasdaq has seen some declines. Stanley pointed out that the S&P 500’s steadiness and the Nasdaq’s downturn indicate a healthy market diversification, which can benefit investors.
In the broader context, geopolitical tensions are rising, particularly between the U.S. and Iran, as President Trump hinted at possible military action. This has led to a spike in oil prices due to fears of conflict.
For the week, the S&P 500 is showing modest growth of 0.4%, while the Nasdaq is on track to end a five-week losing streak, gaining 0.6%. The Dow, however, may finish the week with a slight loss of about 0.2%.
This mixture of economic data and geopolitical uncertainty paints a complex picture for investors as they navigate the current financial landscape.
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