NEW YORK, Feb 20, 2026, 09:01 (EST)
U.S. stock index futures dipped on Friday after data showed economic growth slowed more than expected in the fourth quarter while inflation rose faster than forecast in December. At 8:34 a.m. ET, S&P 500 E-mini futures — contracts tied to the benchmark index — were down 0.28%, Nasdaq 100 E-minis fell 0.39% and Dow E-minis were off 0.23%. (Reuters)
The numbers land as investors try to pin down how long the Federal Reserve keeps borrowing costs high. Slower growth usually pulls rate-cut bets forward; firmer inflation pushes them back.
That tug-of-war has been driving day-to-day trading, with earnings and geopolitical headlines also feeding straight into oil prices and, by extension, inflation expectations. Friday’s releases hit before the opening bell.
The Bureau of Economic Analysis said gross domestic product — the broadest measure of economic output — increased at an annual rate of 1.4% in the fourth quarter of 2025, down from 4.4% in the prior quarter. It said the report was pushed back from its original January date because of the October–November 2025 government shutdown, and showed gains in consumer spending and investment offset by declines in government spending and exports. (Bureau of Economic Analysis)
Reuters reported the nonpartisan Congressional Budget Office estimated the shutdown shaved 1.5 percentage points off fourth-quarter GDP, and that $7 billion to $14 billion of lost output would not be recovered. President Donald Trump blamed the shutdown in a social media post ahead of the release and again pressed for lower interest rates. (Reuters)
On prices, the personal consumption expenditures (PCE) index — the Fed’s preferred inflation gauge — showed a hotter December than markets were braced for, and core PCE (which strips out food and energy) rose 0.4% on the month and 3.0% from a year earlier, Reuters reported. Barclays economist Pooja Sriram flagged a jump in legal services inflation that “tends to be a very volatile category,” a reminder that the next inflation reads could stay messy. (Reuters)
The fresh data followed a soft Thursday close on Wall Street after Walmart’s downbeat year-ahead forecast and mixed economic reports. “Investors are weighing some of the economic data,” said Chuck Carlson, CEO at Horizon Investment Services, who also pointed to a rotation away from mega-cap tech momentum stocks. (Reuters)
Oil has become part of the story again. Brent hovered near $71 a barrel on Friday and traders watched a 10-to-15-day deadline Trump set for Iran to curb its nuclear programme, with any disruption risk focused on the Strait of Hormuz — a chokepoint for roughly a fifth of global supply. “The market is nervous, it’s going to be a wait-and-see day,” said Ole Hansen, head of commodity strategy at Saxo Bank. (Reuters)
Private-credit names were also under pressure after Blue Owl’s latest capital-return plan rattled investors. Blue Owl’s shares closed down 5.9% on Thursday and peers Apollo and Ares also fell, Reuters reported; Oppenheimer analyst Mitchel Penn said “nobody is getting a break” in private assets. (Reuters)
For context, the week has been uneven even before Friday’s data. The S&P 500 was up 0.4% through Thursday while the Dow was down 0.2%; for the year, the S&P was up 0.2% and the Nasdaq was down 2.4%, the Associated Press reported. (AP News)
But the GDP figure is only an advance estimate, and the picture can change as more data rolls in. Investopedia noted the government revises the GDP report twice, with final numbers due in April — a timeline that leaves plenty of room for the growth-inflation mix to shift again. (Investopedia)
