NEW YORK, Feb 20, 2026, 09:01 (EST)
Stock index futures in the U.S. edged lower Friday morning, after fresh data pointed to a sharper-than-expected slowdown in fourth-quarter economic growth and a hotter inflation reading for December. As of 8:34 a.m. ET, S&P 500 E-mini futures slipped 0.28%, Nasdaq 100 E-minis lost 0.39%, and Dow E-minis declined 0.23%.
Investors are watching these numbers closely, looking for clues on just how long the Federal Reserve might hold rates up. Slower growth tends to bring those rate-cut bets forward. But if inflation stays firm, those expectations get pushed out.
Day-to-day trading keeps getting pulled in both directions, as earnings reports and geopolitical headlines quickly ripple through oil prices, shaping inflation expectations in the process. Friday’s releases landed ahead of the opening bell.
The Bureau of Economic Analysis reported a 1.4% annualized gain in gross domestic product for the fourth quarter of 2025, a sharp slowdown from the previous quarter’s 4.4%. The release, delayed from January due to the government shutdown in October and November 2025, highlighted that while consumer spending and investment picked up, these were outweighed by drops in government outlays and exports.
The Congressional Budget Office, according to Reuters, figured the shutdown cut fourth-quarter GDP by 1.5 percentage points. Somewhere between $7 billion and $14 billion in lost output won’t be coming back, the CBO added. President Donald Trump, posting on social media ahead of the report, pinned the blame on the shutdown and renewed calls for lower interest rates.
The personal consumption expenditures (PCE) index—the Fed’s inflation benchmark—ran hotter in December than traders anticipated, with core PCE (removing food and energy) up 0.4% for the month and 3.0% year-on-year, according to Reuters. Barclays economist Pooja Sriram pointed to a spike in legal services inflation, calling it “a very volatile category,” and suggested the upcoming inflation prints could remain unpredictable. Reuters
Thursday wrapped up with Wall Street edging lower—Walmart’s cautious outlook for the coming year and a batch of uneven economic numbers pulled the market back. “Investors are weighing some of the economic data,” said Chuck Carlson, CEO at Horizon Investment Services, noting as well that money has started shifting out of the mega-cap tech momentum names. Reuters
Oil’s back in the spotlight. Brent stuck close to $71 a barrel on Friday, with traders keeping a close eye on the 10-to-15-day window set by Trump for Iran to rein in its nuclear program. The main worry: possible disruptions in the Strait of Hormuz, which handles about a fifth of the world’s oil shipments. “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
Shares of Blue Owl slid 5.9% Thursday, after the firm rolled out its new capital-return plan—a move that unsettled investors and sent a chill through private-credit names. Apollo and Ares dropped too, according to Reuters. “Nobody is getting a break” in private assets, Oppenheimer’s Mitchel Penn said. Reuters
This week’s trading has already been choppy ahead of Friday’s numbers. As of Thursday, the S&P 500 posted a 0.4% gain, the Dow slipped 0.2%. Year-to-date, the S&P was sitting on a 0.2% increase while the Nasdaq was off by 2.4%, according to the Associated Press.
Still, that GDP number is just an early read—subject to revision as more information comes in. As Investopedia points out, the government issues two more updates, with the last word on GDP expected in April. That means the growth-versus-inflation story could see more twists before it’s settled.
