NEW YORK (AP) — U.S. stocks are holding steadier Monday in a slowdown from their scary roller-coaster ride in recent weeks. It may not last long, though, with a decision by the Federal Reserve on interest rates coming later in the week and worries continuing about President Donald Trump's trade war.
The S&P 500 was 0.2% higher in early trading, coming off its fourth straight losing week. The Dow Jones Industrial Average was up 98 points, or 0.2%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 0.1% higher.
Stocks have been tumbling recently on worries that Trump's rat -a- tat announcements on tariffs and other policies are creating so much uncertainty that they will push U.S. households and businesses to freeze their spending, which would hurt the economy. Surveys have shown sharp drops in confidence, and some companies are already warning about changes in behavior from their customers.
A report on Monday said U.S. retailers saw weaker revenue last month than economists expected, but it may not have been quite as bad as it seemed on the surface.
Much of the shortfall in growth versus expectations was due to weaker-than-forecast sales of automobiles and lower fuel costs. Outside of them, the performance was closer to expectations.
Treasury yields initially rose immediately following the report’s release. That’s usually an indication of firming confidence among bond investors about the strength of the U.S. economy. But yields quickly gave back a chunk of those gains.
“In our view, this morning’s February retail sales report offers evidence of a limited, modest economic slowdown, rather than signaling a gathering recession,” said Jennifer Timmerman, investment strategy analyst at Wells Fargo Investment Institute.
Still, it's a sharp turnaround for the economy that investors are contemplating a possible recession after it closed last year running at a solid rate. To be sure, hiring still remains relatively healthy, and that could help keep the economy growing if it can continue. But the talk about recession by itself could further sap confidence.
That’s the precarious stage onto which Federal Reserve Chair Jerome Powell will step on Wednesday, when he announces the Fed’s latest decision on interest rates.
Virtually no one expects the Fed to make a move by either lowering or raising its main interest rate. The central bank has been on hold in that regard so far this year, preferring to see how conditions play out before making its next move. Earlier, it had been cutting interest rates sharply last year in hopes of relaxing pressure on the U.S. economy after high inflation had slowed.
The risk of cutting interest rates further is that it could push up inflation. But keeping rates too high for too long could also create unnecessary pain for the economy by slowing borrowing and overall activity.
In the bond market, Treasury yields were easing. The yield on the 10-year Treasury went from 4.28% shortly before the release of the retail sales report to nearly 4.33% immediately afterward. It then pulled back to 4.29%, down from its 4.31% level late Friday.
In stock markets abroad, indexes rose across much of Europe and Asia.
Chinese markets rose after the government reported stronger than expected factory data. Later Monday, officials briefed reporters about Beijing's efforts to get consumers to spend more, seen as key to getting the economy out of its doldrums.
Stocks rose 0.8% in Hong Kong and 0.2% in Shanghai.
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AP Business Writers Matt Ott and Elaine Kurtenbach contributed to this report.
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