As February comes to a close, the S&P 500 has demonstrated remarkable resilience, surging more than 1% on Friday amid a turbulent political landscape marked by the ongoing clash between former President Donald Trump and Ukrainian President Volodymyr Zelenskyy. Investors, undeterred by the headlines, are shifting their focus towards broader economic indicators and corporate earnings, signaling a potential shift in market sentiment.
The S&P 500 rose over 1% on Friday to close out a turbulent February as investors moved beyond the Trump-Zelenskyy confrontation
Stocks managed to close higher on Friday, bringing an end to a tumultuous week and a declining month for the major indices.
During Friday’s trading, there was a brief dip after President Donald Trump and Ukraine President Volodymyr Zelenskyy had a heated exchange in the Oval Office, raising fears about increased geopolitical tensions.
The S&P 500 rose 1.59% on Friday, finishing at 5,954.50. The Dow Jones Industrial Average gained 601.41 points, or 1.39%, ending at 43,840.91. The Nasdaq Composite increased by 1.63%, closing at 18,847.28.
A significant rally occurred as the market approached the close. This surge may have been tied to index rebalancing and other technical buying factors, with a strong imbalance favoring buy orders at the New York Stock Exchange.
Throughout the month, the Nasdaq experienced the largest drop, falling nearly 4% in February, primarily due to a 3.5% decrease this week. This marked the tech-heavy index’s worst month since April 2024.
The S&P 500 experienced a decline of roughly 1% over the week and 1.4% for February. Conversely, the Dow has shown relative strength, gaining about 1% for the week. However, for the month, the 30-stock index saw a decrease of 1.6%.
The major indices turned negative briefly on Friday after an intense confrontation between Trump, alongside Vice President JD Vance, and Zelenskyy during a remarkable media moment at the White House. The leaders convened to discuss a potential mineral rights agreement for Ukraine, which investors hoped could lead to a resolution of the conflict with Russia.
“You either make a deal or we’re out,” Trump told Zelenskyy. “You’re gambling with World War III.”
Trump later took to Truth Social to express that Zelenskyy “is not ready for peace if America is involved.”
“He can come back when he is prepared for peace,” the president remarked, as he had previously promised a swift conclusion to the Russia-Ukraine conflict during his campaign.
The Cboe Volatility Index, a measure of market anxiety, surged as tensions escalated between the leaders. The index climbed to 22.40 at one point, its highest level since January 27.
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The Atlanta Fed indicator suggests that the GDP growth for the first quarter is expected to be negative
Preliminary economic data for the first quarter of 2025 suggests a downturn, as indicated by metrics from the Federal Reserve Bank of Atlanta.
The central bank’s GDPNow tracker shows that the gross domestic product is expected to contract by 1.5% for the January to March timeframe, according to an update released Friday morning.
Recent data reveals that consumer spending fell short of projections due to harsh January weather, coupled with weak export figures, prompting the downgrade. Before the consumer spending report was available, GDPNow had forecasted a 2.3% growth for the quarter.
Although the tracker experiences volatility and usually gains accuracy later in the quarter, it aligns with other indicators reflecting a slowdown in growth.
“This is concerning, despite the natural fluctuations of the high-frequency ‘nowcast’ from the Atlanta Fed,” Mohamed El-Erian, chief economic advisor at Allianz and president of Queens’ College Cambridge, expressed in a social media post on platform X.
Initially, the gauge indicated potential GDP growth of up to 3.9% in early February; however, it has steadily declined as new data emerged.
On Friday, the Commerce Department announced a 0.2% drop in personal spending for January, falling short of the Dow Jones forecast of a 0.1% increase. When adjusted for inflation, spending decreased by 0.5%, resulting in a loss of one full percentage point in the GDP contribution, lowering it to 1.3%, according to the GDPNow estimation.
Simultaneously, the impact of net exports plummeted from -0.41 percentage points to -3.7 percentage points.
This collection of data affecting the growth outlook comes amid surveys showing waning consumer confidence and concerns about rising inflation. Additionally, the Commerce Department revealed that a favored inflation measure by the Fed fell during the month, with the core personal consumption expenditures price index dropping to 2.6%, down by 0.3 percentage points from December.
This week also saw troubling signs from the labor market, with initial unemployment claims reaching levels not seen since early October.
Moreover, the bond market is adjusting to expectations of slower growth. The 3-month Treasury yield surpassed the 10-year note this week, a historically reliable recession indicator for a 12- to 18-month timeline.
The economic and policy uncertainties have made for a rocky start to the year in the stock market. The Dow Jones Industrial Average has increased by 2% in 2025, amidst erratic swings in a turbulent news environment.
“I feel that the complacency present in asset markets is poised for disruption,” remarked Joseph Brusuelas, chief U.S. economist at RSM.
Market sentiment increasingly suggests that the Fed will address the slowdown with several interest rate cuts this year. Traders in the fed funds futures market boosted the likelihood of a quarter percentage point decrease in June to roughly 80% as of Friday afternoon and raised the chances for a total of three cuts this year.
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Intel has postponed the commencement of operations at its Ohio chip plant to the next decade. Initially scheduled to begin production by 2026
Intel has announced a delay in the opening of its chip manufacturing facility in Ohio, the struggling chipmaker revealed on Friday.
The company will not finish construction of the first plant until 2030, with operations expected to begin that year or the following one. The second factory in the proposed $100 billion complex is projected to be complete in 2031, with production likely starting the next year. Initial plans had set the production start date for the first plant in 2025.
“As we keep investing in our U.S. operations, it’s crucial to synchronize the launch of our fabrication units with our business needs and broader market trends,” stated Naga Chandrasekaran, the vice president and global operations head for Intel Foundry Manufacturing, in a statement. “This strategy has always been fundamental for us, as it helps manage our capital wisely and respond to customer demands.”
Once the world’s leading semiconductor manufacturer, Intel has faced decline recently, primarily due to its marginalization during the artificial intelligence surge. Last year, the stock plummeted by over 50%, and the company has grappled with decreasing sales while attempting a deeper foray into the capital-heavy chip fabrication sector.
In August, shares experienced the steepest single-day decline in 50 years after the company reported unsatisfactory quarterly outcomes. Intel also announced it would cut 15% of its workforce, making it a possible acquisition target while contributing to the dismissal of CEO Pat Gelsinger in December.
Intel has significantly benefited from the CHIPS and Science Act initiated by former President Joe Biden. Most recently, the government provided the company with a grant of approximately $8 billion in November to enhance semiconductor production in the United States.
