Mattel and Disney Renew Multi-Year Global Licensing Agreement for Toy Story Franchise

NEW YORK (AP) — U.S. stocks are drifting Thursday following a jumble of mixedreports that shed little clarity on how the U.S. economy is managing through President Donald Trump’s trade war.

The S&P 500 was 0.2% lower in early trading and potentially on track for its first drop of the week. The Dow Jones Industrial Average was down 179 points, or 0.4%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 0.4% lower.

Treasury yields also sank in the bond market following the reports, with the headliners saying shoppers spent less at U.S. retailers last month than expected, while inflation was better at the wholesale level than economists expected. Other updates said U.S. manufacturing looks like it’s still contracting but fewer U.S. workers are applying for unemployment benefits than expected.

Altogether, the reports suggested the Federal Reserve may have more room to cut interest rates later this year to bolster the U.S. economy if it weakens under the weight of high tariffs. But they did little to spell out whether the economy is falling toward a recession, as many investors had been fearing, or shaking off the uncertainty after Trump called off many of his tariffs temporarily.

Such uncertainty showed itself in Walmart’s stock, which fell 3.8% even though it reported a bigger profit for the latest quarter than analysts expected.

Like other U.S. companies struggling with the uncertainty caused by Trump’s on-again-off-again rollout of tariffs, Walmart did not offer a forecast for how much profit it will make in the current quarter, though it did say it expects sales to grow between 3.5% and 4.5%, not including the swings that shifting values of foreign currencies can bring.

The nation’s largest retailer also said that it must raise prices due to higher costs caused by Trump’s tariffs.

Elsewhere on Wall Street, Dick’s Sporting Goods tumbled 12.2% after it said it would buy the struggling Foot Locker chain for $2.4 billion. Dick’s also said that it made a better profit for the latest quarter than analysts expected.

Foot Locker soared 83% after coming into the day with a loss of nearly 41% for the year so far.

It’s the second buyout of a major footwear company in as many weeks as business leaders struggle with uncertainty over how Trump’s tariffs will impact companies that make many of their products overseas. Last week Skechers announced that it was being taken private by 3G Capital for $9 billion.

In the oil market, crude prices sank more than 2% on expectations that more petroleum could be set to flow into global markets because of a possible deal between the United States and Iran on the Middle Eastern country’s nuclear program. Such a deal would help pave the way to ease sanctions against Tehran.

Elsewhere, China moved to reverse some of its “non-tariff” measures against the U.S. as agreed with Washington in their temporary trade war cease-fire, while demanding that the U.S. side “immediately correct its wrong practices.”

A Chinese Commerce Ministry spokesperson accused the Trump administration of violating world trade rules by announcing that use of Ascend computer chips made by China’s Huawei Technologies violates U.S. export controls.

Stock indexes fell 0.8% in Hong Kong and 0.7% in Shanghai, while indexes were mixed elsewhere in Asia and in Europe.

In the bond market, the yield on the 10-year Treasury fell to 4.48% from 4.53% late Wednesday.

The two-year Treasury yield dropped to 3.98% from 4.05% as expectations built among traders that the Fed will resume cutting its main interest rate as soon as September.

The Fed has been keeping interest rates on hold this year as it waits to see the effects of Trump’s trade policies. Cutting interest rates would help juice the economy by making it easier for U.S. households and companies to borrow and spend. But it would also push upward on inflation when worries are high that Trump’s tariffs will do the same thing.

AP Business Writers Matt Ott and Elaine Kurtenbach contributed.

Traders Jonathan Mueller, right, and Michael Capolino work on the floor of the New York Stock Exchange, Wednesday, May 14, 2025. (AP Photo/Richard Drew)

Trader Jonathan Corpina works on the floor of the New York Stock Exchange, Wednesday, May 14, 2025. (AP Photo/Richard Drew)

Trader Edward Curran works on the floor of the New York Stock Exchange, Wednesday, May 14, 2025. (AP Photo/Richard Drew)

Currency traders watch monitors near a screen showing the Korea Composite Stock Price Index (KOSPI) and the foreign exchange rate between U.S. dollar and South Korean won, top right, at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Thursday, May 15, 2025. (AP Photo/Ahn Young-joon)

Trader William Lawrence works on the floor of the New York Stock Exchange, Wednesday, May 14, 2025. (AP Photo/Richard Drew)

Currency traders watch monitors near a screen showing the Korea Composite Stock Price Index (KOSPI), top left, and the foreign exchange rate between U.S. dollar and South Korean won, top center, at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Thursday, May 15, 2025. (AP Photo/Ahn Young-joon)

Currency traders watch monitors near a screen showing the Korea Composite Stock Price Index (KOSPI) in Seoul, South Korea, Thursday, May 15, 2025. (AP Photo/Ahn Young-joon)