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Dell falls after forecasting drop in FY26 gross margin

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HP falls on downbeat quarterly profit forecast

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January PCE price index rises 2.5%

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Indexes: Dow up 0.47%, S&P 500 up 0.10%, Nasdaq down 0.26%

(Updates for market open)

By Johann M Cherian and Sukriti Gupta

Feb 28 (Reuters) -

Wall Street's main indexes were mixed in choppy trading on

Friday as investors avoided large bets after data showed

consumer spending fell in January, exacerbating worries that the

world's largest economy might be stalling.

A

Commerce Department report

showed that inflation rose in line with expectations in the

previous month. However, consumer spending, which accounts for

more than two-thirds of the economy, dropped 0.2% after an

upwardly revised 0.8% increase in December.

"Spending came in lower than we were looking for... most

of it I would attribute to a cooling economy, which presents a

dilemma for the Fed in the sense that you still have inflation

and you have an economy that is moving lower. If you add them

together, that equals stagflation," Peter Cardillo, chief market

economist at Spartan Capital Securities.

Friday's report is important for investors trying to

gauge the central bank's next policy move, after policymakers

reiterated a hawkish stance on interest rates. The fear has been

that the new Donald Trump administration's policies, especially

trade restrictions, could lead to a rise in domestic inflation.

Traders see the Fed lowering borrowing costs twice by

December, little changed from before the report, according to

data compiled by LSEG. Investors will assess comments from

Chicago Fed President Austan Goolsbee later in the day.

At 10:06 a.m. ET, the Dow Jones Industrial Average

rose 204.26 points, or 0.47%, to 43,443.76, the S&P 500

gained 6.10 points, or 0.10%, to 5,867.67 and the Nasdaq

Composite lost 47.51 points, or 0.26%, to 18,490.55.

Sectors that fare better in times of economic

uncertainties such as consumer staples and utilities

rose about 1% each. On the flip side, technology

stocks limited gains.

The CBOE Volatility Index, also known as Wall

Street's fear gauge, touched a one-month high and was last up at

21.26 points.

Multiple recent reports suggesting a stalling economy and

concerns that tech companies such as Nvidia ( NVDA ) and

Microsoft ( MSFT ) might be overspending on

artificial-intelligence infrastructure have put Wall Street's

main indexes on track for monthly declines.

The benchmark S&P 500 logged declines in five of the

past six sessions and is set for its biggest one-month drop

since April 2024. The tech-heavy Nasdaq is down about 9%

from its all-time high and is headed for its steepest one-month

fall since September 2023.

Nvidia ( NVDA ) fell 1.9% after an 8.5% slide in the previous

session, after the chip giant's weaker-than-expected quarterly

gross margin forecast overshadowed an upbeat revenue outlook.

Dell lost 5.7% as the PC maker forecast a decline

in its adjusted gross margin rate for fiscal 2026.

Peer HP Inc ( HPQ ) fell 6.6% after its quarterly profit

forecasts missed expectations.

Trump's latest threat to slap an extra 10% duty on imports

from China hit U.S.-listed China stocks such as Alibaba

and Xpeng, which fell 3.2% and 6.5%, respectively.

NetApp ( NTAP ) plunged 11.3% after the data storage

firm lowered its annual results forecast.

Walgreens fell 4.8% after a report said private

equity firm Sycamore Partners is closing in to buy out the

pharmacy chain.

Advancing issues outnumbered decliners by a 1.46-to-1

ratio on the NYSE, while declining issues outnumbered advancers

by a 1.24-to-1 ratio on the Nasdaq.

The S&P 500 posted 27 new 52-week highs and 10 new lows,

while the Nasdaq Composite recorded 21 new highs and 228 new

lows.