(Bloomberg) — Stocks churned as Nvidia Corp.’s results failed to revive the artificial-intelligence-rally that has powered the bull market.
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Equities came well off session highs, with tech shares leading losses. The chipmaker at the heart of the AI boom erased earlier gains as its good-but-not-great numbers underwhelmed investors. The dollar rose as President Donald Trump said 25% tariffs on Canada and Mexico are on track to go into place on March 4, adding he would impose an additional 10% tax on Chinese imports.
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All the uneasiness around the actual impact of those potential tariffs on things like trade, the economy, inflation and even geopolitics kept Wall Street traders on their toes. And there was no major relief from Thursday’s big batch of economic data — which was mixed at best.
For starters, data showed the US economy advanced at a healthy pace and inflation was more stubborn than initially estimated at the end of 2024. Gross domestic product increased at an unrevised 2.3% annualized pace in the fourth quarter. The primary growth engine — consumer spending — advanced at a 4.2% pace.
“Investors want lower rates from the Fed, but they don’t want to get there by seeing a notable deterioration in the underlying economy,” said Bret Kenwell at eToro. “At the very least, if the economy is going to slow, investors will want to see inflation slow down too.”
The S&P 500 wavered. The Nasdaq 100 lost 0.6%. The Dow Jones Industrial Average gained 0.6%.
The yield on 10-year Treasuries advanced three basis points to 4.29%. The Bloomberg Dollar Spot Index rose 0.5%.
To Jim Baird at Plante Moran Financial Advisors, the GDP report reaffirms, with some additional refinement, what was already understood: The economy closed out 2024 on with solid momentum, with consumers playing a particularly important role in driving the economy in the final months of the year.
Meantime, the Federal Reserve’s preferred metric — the personal consumption expenditures price index excluding food and energy — climbed 2.7%, faster than the 2.5% initially reported. That was driven mainly by services costs. Monthly figures on Friday are forecast to show the first decline in inflation-adjusted personal spending in a year after a robust holiday-shopping season.