The benchmark S&P 500 fell into erratic trading on Friday and was on track to end the week lower, along with the Nasdaq and Dow, as investors weighed a mixed run of economic data against the widening conflict in the Middle East.

The financial-heavy Dow was hit hardest this week, putting it on track for its biggest monthly loss since December 2024.

A Commerce Department report showed economic growth slowed more sharply in the fourth quarter, following weaker improvements in consumer spending and business investment, while a separate report showed consumer spending rose slightly more than expected in January.

According to LSEG-compiled data, traders now expect a 25 basis point interest rate cut by the Federal Reserve by June 2027, compared with expectations for two cuts earlier this month. Barclays now expects two 25-basis-point rate cuts, one in September this year and the next in March 2027.

“This adds to the narrative of stagflation, which is one of the big market fears. If we continue to see pressure from higher oil prices while the economy is slowing at the same time, that’s not good,” Steve Sosnick, chief market analyst, Interactive Brokers.

The Fed will likely keep interest rates unchanged when it meets next week. Rising energy costs could complicate the central bank’s policy plans as other reports point to price pressures and a softening job market.

Meanwhile, a University of Michigan survey showed that consumer sentiment dipped in early March due to concerns about higher energy costs.

Crude prices edged closer to $100 a barrel as hostilities in the Middle East showed few signs of easing despite assurances of a quick resolution by the Trump administration.

Efforts such as the International Energy Agency’s record emergency oil release and a US 30-day license for countries to buy stranded Russian oil and petroleum products have so far failed to reduce the cost increase.

At 11:30 a.m., the Dow Jones Industrial Average was up 7.82 points, or 0.02%, at 46,685.67, the S&P 500 was down 16.01 points, or 0.24%, at 6,656.61 and the Nasdaq Composite was down 19.04 points, or 0.40%. to 22,206.61.

Wall Street’s fear gauge, the CBOE Volatility Index, faltered and was last down 0.13 points at 27.16, while the rate-sensitive Russell 2000 index fell 0.3%.

Six of 11 S&P 500 sectors are higher, with utilities leading the way with a gain of 1%, while heavyweight tech stocks are down 1.1%.

Credit quality concerns deepened this week after Morgan Stanley halted redemptions at one of its private credit funds, following similar moves by BlackRock and Blue Owl in recent weeks.

JPMorgan Chase restricted lending to private credit players, while Blackstone faced a surge in redemptions.

Blue Owl rose 2.7%, and BlackRock each gained 1.4%, recovering from sharp losses in the previous session.

The broader S&P 500 financial sector fell 2.7% for the week.

Travel stocks, hit hardest by the war, and higher energy costs, were mixed

Alaska Airlines and American Airlines fell 1.2%, while Carnival rose 1.3%.

Design software maker Adobe fell 6.6% as longtime CEO Shantanu Narayan will step down from his role once a successor is appointed, and worries about its strategy will resurface as it grapples with AI disruption.

The crypto-firm strategy rose 4.9% as bitcoin prices rose more than 4%.

The megacap meta fell 3% after a report said it has postponed the release of its artificial intelligence model “Avocado” from this month until at least May.

Declining issues outnumbered advancers by a 1.17-to-1 ratio on the NYSE and by a 1.24-to-1 ratio on the Nasdaq.

The S&P 500 posted 11 new 52-week highs and 7 new lows while the Nasdaq Composite hit 29 new highs and 123 new lows.