NEW YORK — Wall Street is pulling further from its record after reports on Friday showed worries about President Donald Trump’s policies may be hitting the U.S. economy.

The S&P 500 was down 0.4% in morning trading, a day after a weaker-than-expected profit forecast from Walmart helped knock it off its all-time high. The Dow Jones Industrial Average was down 357 points, or 0.8%, as of 10:20 a.m. Eastern time, and the Nasdaq composite was 0.3% lower.

Stock indexes pulled back following a series of weaker-than-expected reports on the economy. One suggested U.S. business activity is nearing stall-speed, with growth decelerating to a 17-month low. The preliminary report from S&P Global said activity for U.S. services businesses unexpectedly shrank, and many businesses in the survey reported optimism slumping because of worries about Washington.

“Companies report widespread concerns about the impact of federal government policies, ranging from spending cuts to tariffs and geopolitical developments,” said Chris Williamson, chief business economist at S&P Global Market Intelligence. “Sales are reportedly being hit by the uncertainty caused by the changing political landscape, and prices are rising amid tariff-related price hikes from suppliers.”

US Consumers Preparing for Higher Inflation

A separate report said U.S. consumers are also preparing for higher inflation because of potential tariffs. They’re broadly expecting prices to be 4.3% higher 12 months from now, which is a big jump from last month’s forecast of 3.3% inflation, according to a survey by the University of Michigan. That fits with preliminary data the survey suggested earlier, though a divide is evident underneath the surface.

Inflation expectations are rising for political independents and Democrats, while falling slightly for Republicans.

A third report, meanwhile, said sales of previously occupied homes were weaker last month than economists expected. Relatively high mortgage rates have been hurting the housing market.

On Wall Street, Akamai Technologies helped drag the market lower even though the cybersecurity and cloud computing company reported stronger profit than expected. It fell 15.4% as investors focused instead on its forecasts for revenue and other financial measures this upcoming year, which fell short of analysts’ expectations.

UnitedHealth Group Dives

UnitedHealth Group was one of the heaviest weights on the market and fell 8.7% following a report that the U.S. Department of Justice has started an investigation into the health care giant’s Medicare billing practices. When asked for comment about the report from The Wall Street Journal, a UnitedHealth representative said they “will let you know if we have anything to say.”

On the winning side of Wall Street was Booking Holdings, the company behind Booking.com and OpenTable. It climbed 4.2% after delivering a better profit for the final three months of 2024 than analysts expected. It was able to grow its revenue while also cutting its operating costs.

Celsius Holdings, which sells “better-for-you” energy drinks, leaped 25% after saying it agreed to buy Alani Nu, a beverage company that focuses on female customers. Analysts called the purchase price, $1.65 billion net of tax effects, reasonable and said the deal should quickly add to its profits.

Overall, the S&P 500 is still heading for a week of only modest moves. It’s on track for a loss of only 0.4%. Helping to lift stocks has been a steady parade of better-than-expected profit reports. That’s been working against worries about stubbornly high inflation, which could prevent the Federal Reserve from delivering more relief for the economy and financial markets through lower interest rates.

10-Year Treasury Sinks

Treasury yields eased in the bond market following the economy reports. The yield on the 10-year Treasury sank to 4.45% from 4.51% late Thursday. The two-year Treasury yield, which more closely tracks expectations for upcoming Fed action, fell to 4.23% from 4.27%.

In stock markets abroad, indexes were mixed in Europe after rising across much of Asia.

In Japan, the Nikkei 225 edged up 0.3% after the government said a key measure of inflation remained above the Bank of Japan’s target level last month. That could encourage it to keep raising interest rates. Last month, the Bank of Japan raised its key policy rate to about 0.50% from 0.25%.

Hong Kong’s Hang Seng jumped 4% for one of the world’s largest moves,, boosted by a surge for e-commerce firm Alibaba, which reported stronger profit for the end of last year than expected. It also talked up its artificial-intelligence developments.

Excitement around AI, along with the potential profits that it can create, has been one of the main reasons stock indexes have rallied to their records.