Stock markets slide back as all eyes on U.S. economic data and tariffs
Global News
Wall Street indexes were on track to open lower on Friday after data showed U.S. economic growth slowed more than expected in the fourth quarter.
Wall Street indexes were on track to open lower on Friday after data showed U.S. economic growth slowed more than expected in 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 Analysis 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 year’s record government shutdown and moderating consumer spending.
A separate report showed underlying U.S. inflation increased more 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, compared to 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 data.
“(A) combination of a little bit lower growth than we were looking for in the GDP release and a little bit higher inflation than we were anticipating in the PCE – that’s generally not a good combination for the stock market,” said Steve Wyett, chief investment strategist at BOK Financial.
“We don’t think the Fed needs to be aggressive in their rate cuts. So on balance, this data that we got today still fits within that narrative.”
S&P Global’s business activity survey and the University of Michigan’s consumer sentiment data are due later in the day.
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