NEW YORK (AP) — U.S. stocks are slipping Friday after a discouraging report suggested U.S. consumers are bracing for higher inflation, while a separate update gave a mixed picture of the U.S. job market.The S&P 500 was 0.6% lower in midday trading and close to wiping out what had been a modest gain for the week. The Dow Jones Industrial Average was down 260 points, or 0.6%, as of 11 a.m. Eastern time, and the Nasdaq composite was 0.9% lower.The action was stronger in the bond market, where Treasury yields climbed after a report suggested sentiment is unexpectedly souring among U.S. consumers. The preliminary report from the University of Michigan said U.S. consumers are expecting inflation in the year ahead to hit 4.3%, the highest such reading since 2023.It’s the second straight month where expectations for inflation have jumped by an unusual amount among U.S. households. Some economists pointed to the possibility of tariffs on a wide range of products imported into the United States, which President Donald Trump has proposed and could ultimately push up prices for U.S. consumers.The consumer-sentiment data followed a mixed report on the U.S. job market that arrived before the U.S. stock market opened. It showed hiring last month was less than half of December’s rate, but it also included some encouraging nuggets for workers: The unemployment rate eased, and workers saw bigger gains in average wages than economists expected.All the data, taken together, could keep the Federal Reserve on hold when it comes to interest rates. The Fed began cutting its main interest rate in September in order to relax the pressure on the economy and job market, but it warned at the end of the year that it may cut fewer times in 2025 than it earlier expected given worries about inflation staying stubbornly high.Interest rates are one of the things Wall Street cares most about because lower rates can encourage investors to pay higher prices for stocks and other investments. The downside is they can also give inflation more fuel.For Scott Wren, senior global market strategist at Wells Fargo Investment Institute, the jobs report did nothing to change his forecast for the Fed to cut the federal funds rate just once in 2025. That’s a touch more conservative than many traders on Wall Street, who collectively see a nearly 46% chance that the Fed will cut at least twice, according to data from CME Group. Of course, some traders are also betting on the possibility for zero cuts.Wren says financial markets could stay shaky in the near term, not only because of uncertainty about interest rates but also about Trump’s tariffs and other unknowns around the world.After rocking financial markets around the world at the start of this week, worries about a potentially punishing global trade war have eased a bit after Trump gave 30-day reprieves for tariffs on both Mexico and Canada. But “Europe might be next, and even if the final outcome is benign, uncertainty could we
Ven. Feb 7th, 2025
