NEW YORK (AP) — U.S. stocks are edging higher in tentative trading after the Supreme Court struck down President Donald Trump’s sweeping tariffs, which had been a source of volatility for the market. The S&P 500 was 0.1% higher a few minutes after the court announced its ruling. It had been drifting between small gains and losses earlier in the morning, after discouraging reports showing slowing growth for the economy and faster inflation created relatively few ripples in the market. The Dow Jones Industrial Average added 20 points, or less than 0.1%, and the Nasdaq composite rose 0.1%. Treasury yields also remained fairly muted in the bond market.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

NEW YORK (AP) — U.S. stocks are drifting Friday after discouraging reports showing slowing growth for the economy and faster inflation created relatively few ripples in the market.

The S&P 500 added 0.1% after flipping earlier between small gains and losses. The Dow Jones Industrial Average was down 19 points, or less than 0.1%, as of 9:59 a.m. Eastern time, and the Nasdaq composite was 0.2% higher.

Treasury yields also did not move much in the bond market following the economic reports. Both updates were certainly disappointing, and they underscored the tricky situation the Federal Reserve faces as it sets interest rates, but they did not change traders’ expectations much for what the Fed will ultimately do.

One report said the U.S. economy’s growth slowed to a 1.4% annual rate during the end of 2025. That’s down from a 4.4% burst during the summer and “a bummer of a number,” according to Brian Jacobsen, chief economic strategist at Annex Wealth Management.

The second report said the measure of inflation that the Fed likes to use accelerated to 2.9% in December from 2.8% in November. An underlying measure that economists consider a better predictor of where inflation may be heading quickened to 3% from 2.8%.

What makes things difficult for the Fed is that it has no tool to fix both a slowing economy and high inflation at the same time. It could lower interest rates to give the economy a boost, as it did last year and as President Donald Trump has been demanding, but that would risk worsening inflation.

Fed officials said at their last meeting that they want to see inflation fall further before they would support cutting rates further.

Following the reports, traders are still mostly betting that the Fed will lower rates at least twice by the end of this year, according to data from CME Group. But some shifted the timing for when the cuts could begin to slightly later in the summer.

Source: WPLG