The S&P 500 changed a little on Friday. It paused after a strong performance earlier in the week. Investors weighed the latest developments on global trade and inflation.
The Dow Jones Industrial Average shed 165.35 points, or 0.37%, to close at 44,546.08. The Nasdaq Composite ticked down 0.01% to 6,114.63.
The Russell 2000 gained 0.41% to close at 20,026.77. Buoyed by improved sentiment, the three major averages ended the week in the green.
Stock Market Volatility: Why FIIs are selling? DEA Secretary Ajay Seth respondshttps://t.co/otfWK3QlCQ
— ET NOW (@ETNOWlive) February 17, 2025
This led to more certainty regarding the President’s tariff plans and constructive new inflation data. Thursday contributed significantly to the week’s advance. This was after a signed memorandum. It laid out a plan to impose levies on goods from countries imposing duties on U.S. products rather than implementing immediate tariffs.
????Nifty snaps 8 day losing streak; Recovers more than 1% off day's low to close flat
Here's how the market panned out today! ???? #Nifty #StockMarket pic.twitter.com/WoFx3XcyQk
— ET NOW (@ETNOWlive) February 17, 2025
The sentiment appeared to calm after the January producer price index report was released last Thursday. The consumer price index report released earlier also suggested a softer inflation reading. The PCE price index remains the Federal Reserve’s preferred inflation gauge.
It is due later this month. “It looks like the economy and inflation aren’t runaway accelerating, causing pressure on rates,” said Matt Stucky. He is the chief portfolio manager at Northwestern Mutual Wealth Management Company.
The S&P 500 closed the week just 4 points below its all-time high, partly supported by global liquidity. pic.twitter.com/tNp3daBloG
— Holger Zschaepitz (@Schuldensuehner) February 15, 2025
He noted the recent move downward in the 10-year Treasury yield benefited equity prices. The yield continued to slide on Friday, dropping nearly 5 basis points to 4.478%.
Chinese tech stocks are playing catch-up – at least a little. The Nasdaq Golden Dragon Index rose 7.3% this week, outpacing the Nasdaq 100, which gained just 2.9%. The surge in China Tech is driven by optimism around AI following DeepSeek, and hopes for govt support. #China has… pic.twitter.com/MuKJvB9yYX
— Holger Zschaepitz (@Schuldensuehner) February 15, 2025
Retail performance affects major indices
According to JPMorgan, the influence of the “Magnificent Seven” on earnings growth among U.S.-based companies is diminishing. The firm noted that the earnings growth spread between Magnificent Seven stocks and the rest of the market fell to 20% in the fourth quarter, the narrowest difference since the first quarter of 2023.
While still a meaningful driver of U.S. earnings growth, the contribution of the ‘Mag-7’ is diminishing,” analyst Mislav Matejka wrote. Although Thursday’s tariff announcements reassured investors, aggressive measures could lead to retaliation from U.S. trading partners. This could negatively impact stocks, UBS warned.
“Markets will be watching closely for any shifts towards full enforcement,” said Solita Marcelli. She is the chief investment officer of Americas for UBS Global Wealth Management. Any such shift could raise inflation risks and affect U.S. economic growth.
Historically, the market tends to perform positively on Valentine’s Day. The broad market index has dipped into negative territory only seven times in past trading sessions. According to the Carson Group’s Ryan Detrick, it has average gains of around 0.28% and a 63.2% positive rate.
However, investors should note that the second half of February usually marks a weaker period for the S&P 500. Dell shares rose more than 3% after Bloomberg News reported that the company was nearing a deal. The deal was to sell servers with Nvidia chips to Elon Musk’s artificial intelligence company, xAI.
This news contributes to Dell’s stock exceeding 9% for the month. Several companies were making headlines in midday trading. Warner Music Group’s stock surged 3% following an upgrade from neutral by Citi analyst Jason Bazinet.
He noted Warner Music’s multiple is “far below” its peers. Roku shares popped nearly 14% after the company reported fourth-quarter results that beat analysts’ expectations. The company posted a loss of 24 cents per share on revenue of $1.2 billion.
This was compared to the anticipated loss of 40 cents per share on revenue of $1.14 billion. The company also reported an increase in household usage of its platform by 12% year over year.
