Wall Street indexes signaled a lower open Friday following data revealing a sharper-than-expected slowdown in U.S. economic growth for the fourth quarter, coupled with a rise in December inflation.
U.S. gross domestic product expanded at a 1.4% annualized rate last quarter, significantly below the 3% economists had projected. This slowdown was attributed to disruptions from the past year's government shutdown and moderating consumer spending.
A separate report indicated that underlying U.S. inflation, measured by the Personal Consumption Expenditure index, rose 0.4% month-over-month in December, exceeding the estimated 0.3% and suggesting further acceleration in January. Traders maintained expectations for a Federal Reserve interest-rate cut in June.
Steve Wyett, chief investment strategist at BOK Financial, noted the market impact: "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."
Investors also closely watched for a potential U.S. Supreme Court ruling on President Trump's tariffs. A decision striking down these tariffs could necessitate the refund of over $175 billion in U.S. tariff collections.
Pre-market trading showed S&P 500 e-minis down 0.28%, Nasdaq 100 E-minis off 0.43%, and Dow E-minis lower by 0.22%.
Blue Owl Capital shed 1.8% in premarket trading amid investor concerns over its capital return strategy. Other private equity firms like KKR & Co and Apollo Global Management also saw declines.
Technology stocks have faced pressure due to high valuations and uncertainty surrounding AI investments. Energy stocks were slightly lower after recent gains, with oil prices falling from six-month highs.
Akamai Technologies fell 7.4% after forecasting lower-than-expected first-quarter adjusted profit. Copart dropped 10.1% following a decline in its second-quarter profit and revenue.