The S&P 500 closed little changed on Friday. But Wall Street notched weekly gains. The Dow Jones Industrial Average shed 165.35 points, or 0.37%.
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It closed at 44,546.08. The Nasdaq Composite ticked down 0.01% to 6,114.63. The Nasdaq 100 added 0.41% to close at 20,026.77.
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The three major averages ended the week in the green. Sentiment improved after investors got more certainty around President Joe Biden’s tariff plans. New inflation data wound up being more constructive than first thought.
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
Traders shrugged off data released Friday that reflected a 0.9% slump in retail sales. This was worse than the Dow Jones estimate for a 0.2% decline. This week, the S&P 500 added about 1.5%.
US stocks have outperformed International stocks for over 16 years, by far the longest run of outperformance in history.
So far this year, we're seeing the opposite, with International stocks up 5.8% vs. a 2.9% gain for the S&P 500.
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— Charlie Bilello (@charliebilello) February 13, 2025
The Dow advanced roughly 0.6%. The Nasdaq was 2.6% higher on the week. A chunk of the week’s advance came Thursday.
This was after Biden signed a memorandum laying out a plan to impose levies on goods from countries with duties on U.S. products, instead of implementing immediate tariffs. Sentiment appeared to calm after January’s producer price index report, released Thursday. The consumer price index report released Wednesday also suggested a softer reading for inflation.
The PCE price index, which is due later this month, is the Federal Reserve’s preferred inflation gauge. “It looks like the economy and inflation aren’t runaway accelerating, causing pressure on rates,” said Matt Stucky, chief portfolio manager at Northwestern Mutual Wealth Management Company.
Retail sales decline affects sentiment
He said the recent move downward in the 10-year Treasury yield is “improving breadth, but it’s also lifting asset prices on the equity side because of that correlation dynamic.”
Treasury yields continued to slide Friday. They recently dropped nearly 5 basis points lower to 4.478%. The influence of the “Magnificent Seven” on earnings growth among U.S.-based companies is dwindling by the quarter, according to JPMorgan.
The firm found that the earnings growth spread between Magnificent Seven stocks and the rest of the market fell to 20% in the fourth quarter. That’s the narrowest difference since the first quarter of 2023, when it came in at 10%. While still a meaningful driver of U.S. earnings growth, the contribution of Mag-7 is diminishing, with some of the group having underwhelmed this quarter,” analyst Mislav Matejka wrote.
Wells Fargo is standing behind Iron Mountain after a rough week. Shares have dropped about 10% so far this week. That would mark its worst weekly performance since 2022.
A large chunk of the decline came Thursday after the company posted slightly weaker-than-expected revenue for the fourth quarter. But it also took a hit earlier in the week after Elon Musk pointed to its data backup services as an example of government inefficiency. Wells Fargo analyst Eric Luebchow told investors to see this pullback as a buying opportunity.
He has an overweight rating and a price target of $125, which implies upside of more than 31% over Thursday’s close. “IRM earnings checked a lot of boxes,” he said. In addition to “calmed nerves” around Musk’s task force called the Department of Government Efficiency, he said the report showed a strong data center pipeline and growth either in line with or ahead of expectations.
Although investors were relieved after Thursday’s tariff announcements, any aggressive moves could lead to retaliation from U.S. trading partners and weigh on stocks, according to UBS. “Markets will be watching closely for any shifts toward full enforcement, as a broad implementation of tariffs would raise inflation risks and likely weigh on equities, and have the potential to dent, but not derail, U.S. economic growth,” said Solita Marcelli, chief investment officer Americas for UBS Global Wealth Management. UBS has a base-case scenario of “selective tariffs” and expects targeted and negotiation-driven tariff outcomes.
“There are risks of a tit-for-tat ratcheting up of measures,” Marcelli wrote in a Friday note to clients. Dell shares were up more than 3% after Bloomberg News reported that the tech company was nearing a deal to sell servers with Nvidia chips to Elon Musk’s artificial intelligence startup, xAI. Friday’s gain put the stock up more than 9% for the month.
