Posts made in February 2025

Stocks fell last week as concerns about sticky inflation and the pace of economic growth rattled investors.

The Standard & Poor’s 500 Index declined 1.66 percent, while the Nasdaq Composite Index dropped 2.51 percent. The Dow Jones Industrial Average also fell 2.51 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, was essentially flat (+0.04 percent).^1,2

S&P 500 Hits New High, Then Slips

Following the Presidents’ Day holiday, stock prices were largely range-bound on Tuesday despite some intraday volatility. Then stocks edged higher, shaking off some new tariff talk and disappointing housing starts data. The S&P 500 marked its third record close of the year on Wednesday.^3,4

On Thursday, stocks were under pressure from the start of trading after a weaker-than-expected outlook from a mega-retailer. The update reinforced some concerns that the economy may be slowing. The selling accelerated on Friday after a consumer sentiment survey showed investors are unsettled about the inflation outlook.

Friday’s decline was the worst of the young year.⁵

Economic Jitters

Investors were forced to navigate a week of disappointing news about the economy and inflation.

First, traders were surprised to hear about slowing demand at the country’s biggest retailer, which soured the outlook for the consumer and the economy. Then, the University of Michigan Consumer Confidence survey fell by 10 percent in February as consumers expressed concerns about higher inflation ahead of possible new tariffs.⁶

This combination prompted investors to move into a “risk-off” position before the weekend.

Footnotes and Sources

1. ^{The Wall Street Journal, February 21, 2025}
2. ^{Investing.com, February 21, 2025}
3. ^{CNBC.com, February 18, 2025}
4. ^{The Wall Street Journal, February 19, 2025}
5. ^{CNBC.com, February 21, 2025}
6. ^{The Wall Street Journal, February 21, 2025}

Stocks advanced last week despite some intra-week volatility as investors showed concern about the economy’s strength.

The Standard & Poor’s 500 Index gained 1.47 percent, while the Nasdaq Composite Index picked up 2.58 percent. The Dow Jones Industrial Average added 0.55 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, tacked on 2.53 percent.^1,2

The Fed Is in “No Hurry”

Stocks opened the week higher, quickly discounting news that the White House would impose 25 percent tariffs on all steel and aluminum imports. Tuesday was a volatility session, punctuated by comments from Fed Chair Powell, who told lawmakers the central bank doesn’t “need to be in a hurry” to lower interior rates further.^3,4

Stocks opened lower Wednesday after a warmer-than-expected update on consumer prices. But stocks showed some resilience and rallied throughout the day. The Nasdaq managed to claw back its losses before Wednesday’s close.⁵

On Thursday, the White House announced a plan for reciprocal tariffs (levies on goods imported into the U.S. from countries that impose tariffs on U.S.-exported goods). But markets rallied on news that the administration would pause tariffs until they determine how much to levy on each country. Stocks took a breather on Friday, shrugging off a weaker-than-expected retail sales report.

The S&P ended shy of a record close, and the Nasdaq finished the week above the 20,000 mark.⁶

Inflation in Focus

The Consumer Price Index report showed prices rose 0.5 percent in January–slightly hotter than expected. Shelter costs remained elevated, increasing 0.4 percent for the month.

Core CPI, which excludes volatile food and energy prices, was also above forecast. Food prices rose 0.4 percent, pushed by a 15.2 percent increase in egg prices related to ongoing issues forcing farmers to cull chicken flocks. Energy prices picked up 1.1 percent as gasoline prices rose.^7,8

Footnotes and Sources

1. ^{The Wall Street Journal, February 14, 2025}
2. ^{Investing.com, February 14, 2025}
3. ^{MarketWatch.com, February 10, 2025}
4. ^{CNBC.com, February 11, 2025}
5. ^{The Wall Street Journal, February 12, 2025}
6. ^{CNBC.com, February 14, 2025}
7. ^{The Wall Street Journal, February 12, 2025}
8. ^{MarketWatch.com, February 10, 2025} 

Stocks posted modest losses last week as tariff deals, January jobs data, and Q4 corporate reports injected volatility into markets.

The Standard & Poor’s 500 Index slipped 0.24 percent, while the Nasdaq Composite Index lost 0.53 percent. The Dow Jones Industrial Average fell 0.54 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, edged ahead 0.17 percent.^1,2

Tariffs, Q4 Reports, and Jobs

On Monday, stocks opened lower on news that tariffs on Mexico, Canada, and China went into effect over the weekend. However, markets rebounded midmorning following news of a U.S.-Mexico deal that delayed new trade rules. News of a similar last-minute agreement with Canada followed.³

Stocks continued their rally midweek, led by technology stocks from companies that provided upbeat Q4 corporate reports.^4,5

The S&P 500 and Nasdaq rose for the third consecutive day on Thursday, while the Dow experienced a slight fall as investors digested more corporate earnings reports. The week closed on a down note as a mixed jobs report and a cautionary inflation outlook disappointed investors.^6,7

Mixed Signals on the Labor Market

As has happened several times in recent years, two job reports told conflicting stories about the state of the jobs market. On Friday, the Bureau of Labor Statistics reported that 143,000 jobs had been added for the month–a four-year low. Earlier in the week, the ADP report showed the economy added 188,000 new jobs, ahead of the 150,000 economists expected.^8,9

Why do the reports tell different stories? Economists point to various factors, including how January can be challenging to measure accurately, typically due to the more significant number of laid-off seasonal workers.¹⁰

Footnotes and Sources

1. ^{The Wall Street Journal, February 7, 2025}
2. ^{Investing.com, February 7, 2025}
3. ^{The Wall Street Journal, February 3, 2025}
4. ^{CNBC.com, February 4, 2025}
5. ^{CNBC.com, February 5, 2025}
6. ^{The Wall Street Journal, February 6, 2025}
7. ^{The Wall Street Journal, February 7, 2025}
8. ^{MarketWatch.com, February 4, 2025}
9. ^{MarketWatch.com, February 5, 2025}
10. ^{The Wall Street Journal, February 7, 2025}