Stock market today: Wall Street eases toward the end of its dreary February

NEW YORK (AP) — Wall Street is easing toward the end of its dreary February, and U.S. stock indexes are drifting following an economic report that included both encouraging and discouraging trends.

The S&P 500 was up 0.6% in morning trading and trimming its loss for the month, which had been on track to be its worst since April. It's fallen in five of the last six days after weaker-than-expected reports on the economy and worries about President Donald Trump's tariffs knocked the index off its all-time high set last week.

The Dow Jones Industrial Average was up 243 points, or 0.6%, as of 10:30 a.m. Eastern time, and the Nasdaq composite was 0.7% higher.

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, though Nvidia recovered some of its 8.5% tumble from Thursday after adding 2%. 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 because their strong spending so far has been a major reason the U.S. economy has avoided a recession despite high interest rates.

U.S. consumers had already given big hints 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 were 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 drag on the economy even without tariffs.

All the uncertainty around not only tariffs but also deregulation and other potential moves 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 could have simply been a result of painfully cold weather around the country and other anomalies. But it also followed several signals of slowing 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.

Most stocks within the S&P 500 rose on Friday, led by AES after the energy company reported profit for the latest quarter that blew past analysts' expectations. CEO Andrés Gluski also said it's seeing strong demand from AI data centers and new U.S. manufacturing plants, and AES stock jumped 9.6%.

Signet Jewelers leaped 11.7% after an investment firm, Select Equity Group, amassed a nearly 10% ownership stake in the retailer and said it's pushing the board to sell the company or find another way to boost its stock price.

They helped offset a 5.5% drop for Dell, which reported stronger profit for the latest quarter than analysts expected but fell short on its revenue.

In the bond market, Treasury yields edged back. The yield on the 10-year Treasury slipped to 4.25% 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.