GLOBAL MARKETS-Stocks edge up, yields fall as U.S. data, tariff risk weighed

Updates to afternoon U.S. trading

By Chuck Mikolajczak

NEW YORK, Feb 14 (Reuters) - A benchmark of global stocks rose on Friday while U.S. Treasury yields dipped as a round of soft U.S. data and the latest tariff announcements raised hopes the Federal Reserve may have some cushion to be more aggressive in cutting interest rates.

The Commerce Department said retail sales dropped 0.9% last month, the biggest decrease since March 2023, after an upwardly revised 0.7% increase in December, and well short of the 0.1% decline estimate of economists polled by Reuters, suggesting rising prices and tariff uncertainty may be leading consumers to tighten spending.

Other data from the Federal Reserve showed factory output dipped 0.1% last month, short of the estimate calling for a 0.1% increase, after a downwardly revised 0.5% rebound in December, as a sharp drop in motor vehicle output weighed.

On Thursday, U.S. President Donald Trump directed his economic team with devising plans for reciprocal tariffs on every country that taxes U.S. imports, raising the risk of a global trade war, but stopped short of imposing another round of duties.

Investors were watching for updates from the Munich Security Conference, where U.S. Vice President JD Vance accused European leaders on Friday of censoring free speech and failing to control immigration, drawing a sharp rebuke from Germany's defence minister and overshadowing discussions on the war in Ukraine.. Vance is also due to meet Ukrainian President Volodymyr Zelenskiy later on Friday.

"It's all about Trump right now. All the other stuff is just noise. What everyone is focused on is, 'What is Trump going to do next, and where are his tariff wars going?'," said Dennis Dick, a trader at Triple D Trading in Ontario, Canada.

On Wall Street, the S&P 500 was roughly unchanged, as energy .SPNY led sector gains while healthcare .SPXHC was the worst performer. The benchmark S&P 500 index .SPX at one point climbed to about 0.1% from its intraday record 6128.18 set on January 24.

The Dow Jones Industrial Average .DJI fell 102.83 points, or 0.23%, to 44,609.64, the S&P 500 .SPX rose 3.39 points, or 0.05%, to 6,118.43 and the Nasdaq Composite .IXIC rose 55.15 points, or 0.27%, to 20,000.17.

Expectations for a cut of at least 25 basis points by the Federal Reserve in June have crept back up to 51.3%, after markets were pricing in a 40.3% change in the prior session, according to CME's FedWatch Tool .

MSCI's gauge of stocks across the globe .MIWD00000PUS rose 2.17 points, or 0.24%, to 884.52 after inching up to a fresh intraday record of 885.66. The index was on track for its fourth weekly gain in five.

The pan-European STOXX 600 .STOXX index closed down 0.24% but was able to secure its eighth consecutive week of gains, its longest streak in a year. European stocks have outperformed their U.S. counterparts since the start of the year, although questions remain whether that can last.

The dollar index =USD, which measures the greenback against a basket of currencies, fell 0.35% to 106.72 after falling to a two-month low of 106.56, with the euro EUR= up 0.32% at $1.0497.

Against the Japanese yen JPY=, the dollar weakened 0.639% to 152.2 while Sterling GBP= strengthened 0.21% to $1.2592 against the greenback.

The yield on benchmark U.S. 10-year notes US10YT=RR fell 5.3 basis points to 4.472% but was still on track for a weekly gain after falling in two consecutive weeks.

Oil prices fell , erasing earlier gains, but were on track to snap a three-week streak of declines.

U.S. crude CLc1 fell to settle down 0.77% to $70.74 a barrel and Brent LCOc1 settled at $74.74 per barrel, down 0.37% on the day.

https://www.reuters.com/markets/ For Reuters Live Markets blog on European and UK stock markets, please click on: LIVE/