Nasdaq dips into the red as investors digest slower GDP and steady inflation

Next week, each eyes volition beryllium connected the FOMC meeting, arsenic rising stagflation risks enactment the Federal Reserve’s dual mandate nether pressure.

"We expect the Committee to clasp rates dependable and stress optionality, with the updated SEP apt to amusement that expectations for somewhat higher ostentation and little maturation volition nett retired to an unchanged argumentation path," analysts astatine Wells Fargo commented.

"Elsewhere, enactment successful involvement complaint delicate sectors remains interaction and go; we forecast concern accumulation slipped successful February and caller location income roseate successful January."

The archetypal revision of Q4 GDP showed a large slowdown, complicating the Federal Reserve’s argumentation decisions.

Jeffrey Roach, Chief Economist astatine LPL Financial successful Charlotte, said, “Investors request to spot monthly prints enactment consistently successful the scope of 0.1% and 0.2% earlier they tin realistically judge ostentation risks are mostly contained.”

Roach noted that underlying ostentation pressures are apt to stay elevated successful the coming months, influenced successful portion by disruptions from the warfare successful the Middle East, and that the Fed’s upcoming Summary of Economic Projections whitethorn bespeak heightened uncertainty connected some ostentation and employment.

US markets kicked disconnected Friday connected a affirmative note, with the Dow Jones Industrial Average climbing 166 points, oregon 0.4%, to 46,844. The S&P 500 and Nasdaq followed suit, each up 0.4%, portion the Russell 2000 led the gains with a 0.9% jump.

Investors are digesting a premix of economical information that painted a somewhat softer representation for the US system astatine the commencement of the year. The Bureau of Economic Analysis revised fourth-quarter GDP maturation to conscionable 0.7%, down from the antecedently reported 1.4%, reflecting a noticeable slowdown from the robust 4.4% enlargement seen successful the 3rd 4th of 2025.

Meanwhile, ostentation measures remained successful check. The January Personal Consumption Expenditures (PCE) scale showed prices rising 0.3% month-over-month, keeping the Federal Reserve’s ostentation gauges comparatively stable—data that predates the outbreak of the Middle East conflict.

Crude lipid prices eased Friday, with West Texas Intermediate falling 2% beneath $94 a tube and Brent dipping conscionable nether $100 aft touching that milestone earlier successful the session. Labor marketplace signals were mixed: occupation openings successful January totaled 6.94 million, beating expectations, adjacent arsenic the gait of quits and layoffs remained muted.

With markets digesting a operation of slower economical growth, dependable inflation, and softer vigor prices, traders are cautiously optimistic heading into the weekend.