Policy Uncertainty Weighing on Market Sentiment: The potential for tariffs and federal workforce reductions weighed on consumer sentiment in February.
Softer Economic Data Provided Another Headwind for Markets: Weaker retail sales and personal spending numbers suggest that the U.S. economy started 2025 on a softer footing.
Fixed Income Market Rally: The 10-year U.S. Government Bond opened the month at 4.55%, peaked at 4.62%, and closed at 4.20%, its lowest level since December of last year.
Equity Market Concentration Downside on Display 2.0: Once again, we saw the downside of market concentration. The “Magnificent 7” stocks dragged U.S. equity markets lower in February.
Watch for a Modest Increase in Jobless Claims: Federal workforce reductions may slightly raise jobless claims in coming weeks. Focus on the private sector’s ability to absorb those losses—an important test of economic strength.
Remain Cautiously Optimistic for 2025: While we continue to believe the economy is in a good place and maintain a positive outlook, we believe it’s a good time to revisit your overall allocation to make sure it aligns with your long-term goals.
Equity Markets
U.S. equity indices mostly declined in February, despite a rebound on the final day of trading. Investors faced weaker economic data and a drop in consumer confidence, likely due to concerns about the new administration’s trade policies and recent reductions in the federal workforce.
The S&P 500 ended the month down 1.3%, falling as much as 4.7% from its high on February 19 to its low on February 27, before recovering on Friday.
Large-cap growth stocks were hit hardest, with the “Magnificent 7” leading the decline, posting an 8.7% drop for the month. Meanwhile, defensive sectors saw relative strength, with consumer staples rising 5.6%. For the year, the S&P 500 is up 1.4%, while the tech-heavy Nasdaq has slipped 2.3%. The Russell 2000 Small Cap Index is down 2.9%, and the Dow Jones Industrial Average has been the top performer, up 3.3%.
Navigating Policy Uncertainty
Navigating Policy Uncertainty
Performance Review & Outlook
Highlights
Equity Markets
U.S. equity indices mostly declined in February, despite a rebound on the final day of trading. Investors faced weaker economic data and a drop in consumer confidence, likely due to concerns about the new administration’s trade policies and recent reductions in the federal workforce.
The S&P 500 ended the month down 1.3%, falling as much as 4.7% from its high on February 19 to its low on February 27, before recovering on Friday.
Large-cap growth stocks were hit hardest, with the “Magnificent 7” leading the decline, posting an 8.7% drop for the month. Meanwhile, defensive sectors saw relative strength, with consumer staples rising 5.6%. For the year, the S&P 500 is up 1.4%, while the tech-heavy Nasdaq has slipped 2.3%. The Russell 2000 Small Cap Index is down 2.9%, and the Dow Jones Industrial Average has been the top performer, up 3.3%.
Dreams are important.
Aspirations are what help make goals reality.