US stocks edge lower after reports show both slowing growth and higher inflation

Wall Street inched slightly lower early Friday but was still clinging to gains made earlier in the week as markets await important data on the state of the U.S. economy.

Futures for the S&P 500, Dow Jones Industrial Average and Nasdaq were all 0.2% lower before the opening bell.

Coming later Friday morning are government reports on inflation and gross domestic product. Friday's consumer spending report comes with the Federal Reserve's preferred measure of inflation, which could impact the central bank's next interest rate move.

A higher measure of inflation could convince Fed officials to stand pat on interest rates for the second time this year out of fear that a cut to rates would further fuel price increases. A decision to leave rates where they are also could be bolstered by recent employment data — particularly the January jobs report — which has been stronger than expected.

At the same time, the government will be releasing its first estimate of fourth quarter gross domestic product, which reflects the nation’s output of goods and services. Analysts are expecting it to show that the economy grew anywhere from 1.9% to 3.5%. A strong report also could move Fed officials to hold interest rates where they are for fear of overheating the economy with cheaper lending.

Fed officials said at their last meeting that they want to see inflation fall further before they would support cutting rates further this year.

European shares were higher Friday at midday after a mixed day of trading in Asia, as worries over risks linked to massive investments in artificial intelligence and a potential U.S.-Iran conflict weighed on major benchmarks.

Germany's DAX rose 0.2% at midday, while the CAC 40 in Paris gained 0.8% and Britain's FTSE 100 picked up 0.5%.

Tokyo’s Nikkei 225 fell 1.1% to 56,825.70 as shares in major banks and other financial institutions skidded on worries over the potential impact of weakening private credit companies that have lent to companies exposed to the risk that AI will steal away their businesses.

That includes market heavyweights like Mitsubishi UFJ Financial Group, which has a partnership with Blue Owl Capital, one such private-credit company. MUFJ's shares dropped 2.2% in Tokyo after Blue Owl lost 5.9% on Thursday.

Toyota Motor Corp. fell 3.7% and Sony shed 3.2%.

In Hong Kong, the Hang Seng lost 1.1% to 26,413.35 as the market reopened following Lunar New Year holidays. Markets in mainland China and Taiwan remain closed until next week.

South Korea's Kospi jumped 2.3% to a new record of 5,808.53, however, led by major defense contractors like Hanwha Aerospace, whose shares soared 6.4%. The company is one of many benefiting from a ramp up in military spending in many countries.

Elsewhere in the region, Australia's S&P/ASX 200 edged 0.1% lower to 9,081.40.

In energy markets, oil prices eased a day after jumping to their highest level since early August, sparked by rising fears that the U.S. and Iran could be headed toward conflict.

Early Friday, U.S. benchmark crude shed early gains, falling 34 cents to $66.06 per barrel. Brent, the international standard, shed 36 cents to $71.30 per barrel.

The price of gold rose just less than 1% while silver gained 3.4%.

Bitcoin was steady, rising less than 1% to $67,513.