Wall Street’s rally fizzles as uncertainty returns amid Trump’s trade war

Wall Street’s big three-day rally is running out of steam, and U.S. stocks are drifting in mixed trading Friday as they near the end of another roller-coaster week.

The S&P 500 was 0.1% lower in midday trading, as nearly three out of every four stocks fell within the index. The Dow Jones Industrial Average was down 237 points, or 0.6%, as of 11:30 a.m. Eastern time, while the Nasdaq composite was 0.3% higher thanks to gains for a handful of influential Big Tech stocks.

Intel weighed on the market after the chip company said it’s seeing “elevated uncertainty across the industry” and gave a forecast for upcoming revenue and profit that fell short of analysts’ expectations. Its stock fell 6.8% even though its results for the beginning of the year topped expectations.

Eastman Chemical fell 5.9% after it gave a forecast for profit this spring that fell short of analysts’ expectations. CEO Mark Costa said that the “macroeconomic uncertainty that defined the last several years has only increased” and that future demand for its products “is unclear given the magnitude and scope of tariffs.”

Skechers U.S.A., the shoe and apparel company, pulled its financial forecasts for the year due to “macroeconomic uncertainty stemming from global trade policies” even though it just reported a record quarter of revenue at $2.41 billion. Its stock fell 4.3%.

They’re the latest companies to say the uncertainty created by President Donald Trump’s trade war is making it difficult to give financial forecasts for the upcoming year.

Stocks had rallied earlier in the week on signals that Trump may be softening his approach on tariffs and his criticism of the Federal Reserve, which had earlier shaken markets. The hope is that if Trump rolls back some of his stiff tariffs, he could avert a recession that many investors see as otherwise likely because of his trade war.

But Trump’s on-again-off-again tariffs may nevertheless be pushing households and businesses to alter their spending and freeze plans for long-term investment because of how quickly conditions can change, sometimes seemingly by the hour.

“Business owners scrambling to figure out their supply chains and exposure to tariffs is more than just a distraction,” according to Brian Jacobsen, chief economist at Annex Wealth Management. “It could be an existential threat, especially for smaller businesses that don’t have the scale or resources to have the same supply chain flexibility as larger firms.”

Helping to keep Wall Street’s losses in check was Alphabet, which rose 2.2%. Google’s parent company reported late Thursday that its profit soared 50% in the first quarter, more than analysts expected.

Alphabet is one of the biggest companies on Wall Street in terms of size, and that gives its stock’s movements extra influence on the S&P 500 and other indexes. Another market heavyweight, Nvidia, also helped push the S&P 500 index upward after the chip company rose 2.2%

In stock markets abroad, indexes rose modestly across much of Europe following more mixed movements in Asia. Tokyo’s Nikkei 225 jumped 1.9%, but stocks in Shanghai slipped 0.1%.

In the bond market, Treasury yields eased some more, and the yield on the 10-year Treasury fell to 4.28% from 4.32% late Thursday.

It’s been generally falling since approaching 4.50% earlier this month in a surprising rise that had suggested investors worldwide may be losing faith in the U.S. bond market’s reputation as a safe place to park cash.

Yields have dropped as several reports on the U.S. economy have come in weaker than expected, raising expectations that the Federal Reserve may cut interest rates later this year to support growth.

A report on Friday morning said sentiment among U.S. consumers sank in April, though not by as much as economists expected. The survey from the University of Michigan said its measure of expectations for coming conditions has dropped 32% since January for the steepest three-month percentage decline seen since the 1990 recession.

The value of the U.S. dollar meanwhile strengthened against the euro and other rival currencies. It’s been recovering some of its sharp, unexpected losses from earlier this month that rattled investors.

—Stan Choe, AP business writer

AP Writers Jiang Junzhe and Matt Ott contributed.