Stan Choe, AP Business Writer
NEW YORK (AP) — US stocks are drifting off Thursday following a churn of mixed reports that make little clear about how the US economy is managing through President Donald Trump’s trade war.
The S&P 500 was up 0.1% in noon trading after wiping off a modest previous loss that was on track with the first decline of the week. The Dow Jones industrial average rose 80 points (0.2%) as of 11:30am Eastern time, with Nasdaq Composite down 0.3%.
Following the report, the Treasury Department sank into the bond market. Headliners said shoppers spent less on US retailers than expected last month, but inflation has improved at wholesale levels than economists expected. Other updates show that US manufacturing still appears to be contracted, but fewer US workers are applying for unemployment benefits than expected.
Overall, the report suggests there could be room for the Federal Reserve to cut interest rates later this year. But they rarely spelled out whether the economy was falling towards a recession as many investors were shaking uncertainty after Trump temporarily suspending many of his tariffs.
China and the US recently agreed to a 90-day standdown for many of their tariffs, but “the trade narrative is not over, and it will take time for the tariffs to feel themselves,” according to Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management.
This uncertainty emerged in Walmart stocks, down 1% despite reporting greater profits in recent quarters than analysts expected.
Walmart said it has decided not to provide a forecast of how much profit it will make this quarter, like other US companies struggling through Trump’s only offensive tariff rollout. Chief Financial Officer John David Rainey noted that “the short-term outcome range is very broad and difficult to predict,” but the company expects sales that do not include the shaking effect of the changing value of foreign currency will increase between 3.5% and 4.5%.
The country’s largest retailer also said prices need to be raised due to the high costs caused by Trump’s tariffs.
Equipment maker Deer also said that, like many other companies, it calls “close market challenges” “dynamic.” It lowered the bottom edge of the forecast range for one year profits. But nonetheless, the stock rose 5.2% after reporting profits in the recent quarter than analysts expected.
Cisco Systems was another winner, bouncing 6.2% after the tech giant similarly breached its profit expectations. Analysts said they were optimistic about Cisco’s artificial intelligence outlook, one of the most powerful forces pushing upwards in the S&P 500.
Elsewhere on Wall Street, Dick’s sporting goods fell 14% after saying they would buy a struggling foot locker chain for $2.4 billion. Dick also said he made better profits for the recent quarter than analysts expected.
Footlockers have soared 85.1% after entering the day, losing about 41% a year so far.
It’s the second acquisition of a major footwear company in a few weeks, just as companies are wrestling with uncertainty about how Trump’s tariffs will affect imported products coming from overseas. Last week, Skechers announced that 3G Capital was closed for $9 billion.
In the oil market, gross prices rose by about 3% to expectations that more oil could be set to flow to global markets as there is a possibility of trading between the US and Iran’s nuclear program. Such transactions could help ease sanctions against Iran, the leading producer of oil.
Elsewhere, China reversed some of its “non-tariff” measures on the US, as agreed with Washington in a temporary trade war, demanding that the US “immediately correct the wrong practices.”
A spokesman for the Chinese Commerce Department accused the Trump administration of violating global trade rules by announcing that the use of Ascend Computer Chips, created by China’s Huawei Technologies, would violate US export controls.
The inventory index fell by 0.8% in Hong Kong and 0.7% in Shanghai, but the index was mixed in Asia and elsewhere in Europe.
In the bond market, the 10-year Treasury yield fell to 4.46% from 4.53% in the second half of Wednesday.
The two-year financial yield, which more closely tracks the Fed’s expectations for action, fell from 4.05% to 3.98%. Traders are betting that the Fed will soon resume cutting key interest rates in September.
The Fed is holding key interest rates this year as they wait to see how Trump’s trade policy unfolds for the economy. Cutting interest rates can help juice the economy by making it easier for US households and businesses to borrow and spend. But if there’s a high concern that Trump’s tariffs will do the same, it also pushes inflation up.
Fed Chair Jerome Powell warned in a speech Thursday that the world could “entertain more frequent and more sustained periods of supply shock.”
AP business writers Matt Ott and Elaine Kurtenbach contributed.
Original issue: May 15th, 2025, 8:21am EDT
