U.S. stocks rallied on Friday to close out a dreary February on a brighter note.
The S&P 500 jumped 1.6% to trim its loss for the month, easing concerns that it would be the worst month since December. The Dow Jones Industrial Average rose 601 points or 1.4%, and the Nasdaq composite climbed 1.6%.
'Current bear market is 100%…' – Shankar Sharma's word of caution for Sensex, Nifty stock market investors@1shankarsharmahttps://t.co/f7CQlAiyye
— ET NOW (@ETNOWlive) March 5, 2025
Much of the recent damage had focused on the market’s biggest winners of recent years, whose momentum had seemed nearly impossible to stop at times. Stocks that flew high in the frenzy around technology slumped sharply but rebounded Friday to recover some of their losses. Tesla, which has become one of the market’s most influential stocks, rose 4% following its 8.5% tumble on Thursday and was a significant force lifting the S&P 500.
Bitcoin bounced back above $84,000 after falling below $79,000 during the morning. Stocks rose following the release of economic data that included both some encouraging and discouraging trends.
Stocks To Watch |????Ready, set, trade! Keep an eye on these stocks as they set the market abuzz #StockMarket pic.twitter.com/4TwqtvINCm
— ET NOW (@ETNOWlive) March 5, 2025
According to the measure that the Federal Reserve prefers to use, inflation across the country decelerated a bit and behaved pretty much exactly as economists expected.
This could give the Federal Reserve leeway to consider adjusting its primary interest rate at some point later this year, which could help boost the economy. However, the report also noted that U.S. households pulled back on their spending during January.
The S&P had quite a journey today just to end up where it opened the trading session, down about 1% from yesterday’s close. #markets #stocks pic.twitter.com/1HqllnANgR
— Mohamed A. El-Erian (@elerianm) March 4, 2025
Stocks rally as February ends.
It was concerning that stocks rallied at the end of February because strong consumer spending has been a significant reason the U.S. economy has avoided a recession despite high interest rates. U.S. consumers are feeling the pressure and worrying about economic conditions. Inflation is still high, even if it’s not as bad as its peak in 2022, and there are widespread concerns that tariffs could push the cost of living even higher.
Wall Street hopes that the tariffs are merely a negotiation tool and that the actual implementation will be less severe than initially feared. However, recent reports have shown that all the talk about tariffs has already pushed U.S. consumers to brace for much higher inflation in the future. This could lead to behavioral changes that might drag on the economy even without actual tariff enforcement.
The S&P 500 is down 6.0% from the 2/19 peak, for the first 5% mild correction of the year.
As great as last year was, we saw two of these. 2023 was very good also and it had one 5% mild correction and one 10% correction.
Even the best years have volatility. pic.twitter.com/POlqjLVK1V
— Ryan Detrick, CMT (@RyanDetrick) March 5, 2025
Most stocks within the S&P 500 rose on Friday, led by AES after the energy company reported profit for the latest quarter that exceeded analysts’ expectations. CEO Andrés Gluski also mentioned strong demand from AI data centers and new U.S. manufacturing plants, causing AES stock to jump 11.7%. Signet Jewelers rose 5.2% after investment firm Select Equity Group amassed a nearly 10% ownership stake in the retailer and pushed the board to consider selling the company or finding other ways to boost its stock price.
These gains helped offset a 4.7% drop for Dell, which reported stronger profit for the latest quarter but fell short on revenue expectations. All told, the S&P 500 rose 92.93 points to 5,954.50. The Dow Jones Industrial Average gained 601.41 to 43,840.91.
