NEW YORK (AP) — The S&P 500 may be heading for its first gain since Christmas on Friday.
The main gauge of Wall Street’s health rose 0.6% in early trading and was on track to break a five-day losing streak, its longest since April. The Dow Jones Industrial Average was up 228 points, or 0.5%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 0.8% higher.
A report coming later in the morning could change the momentum, though. Economists expect the report due at 10 a.m. Eastern time to show U.S. manufacturing is continuing to shrink. It’s been one of the areas of the economy hit hardest by the high interest rates instituted in recent years by the Federal Reserve to stifle inflation.
In the meantime, Tesla rose 0.8% to recover some of its 6.1% tumble from the day before, when it disclosed it delivered fewer vehicles in the last three months of 2024 than analysts expected.
On the losing end of Wall Street was U.S. Steel, which fell 5.2% after President Joe Biden blocked a nearly $15 billion deal proposed by Japan’s Nippon Steel to buy its Pittsburgh-based rival.
Wall Street’s pullback over the last week has dimmed its shine by only a bit following two stellar years for U.S. stock indexes. They’ve vaulted to records after the U.S. economy managed to keep growing despite high interest rates that have helped bring high inflation nearly all the way back to the Fed’s 2% target.
But even though the economy and job market look to remain remarkably solid at the moment, the path ahead is not assured. Part of the reason the S&P 500 set more than 50 all-time highs last year was because of the expectation that the Fed would keep cutting interest rates through 2025 after beginning to ease the pressure on the economy in September.
But traders are ratcheting back expectations for coming cuts because inflation is proving to be stubborn as the Fed tries to wring the last percentage point of improvement for its 2% inflation goal. Worries are rising that tariffs and other policies coming from President-elect Donald Trump could put further upward pressure on inflation. All the while, critics also say U.S. stock prices simply look too expensive after rising so much faster than corporate profits.
The threat of Trump’s tariffs have also hurt stock markets overseas. For China, it’s compounded worries about the world’s second-largest economy, which is already contending with a struggling property market.
Stocks tumbled 1.6% in Shanghai to bring their loss for the week to 5.6%, though they climbed 0.7% in Hong Kong to trim their weekly loss below 2%.
South Korea’s Kospi jumped 1.8% after the acting president and finance minister, Choi Sang-mok, promised to to do more to stabilize the economy. The country is in the midst of a political crisis that has seen two heads of state impeached in under a month.
In Europe, stock indexes were mostly lower.
In the bond market, Treasury yields were holding relatively steady. The 10-year yield held at 4.56%, where it was late Thursday. The two-year Treasury yield, which more closely tracks expectations for Fed action, slipped to 4.24% from 4.25%.
