S&P 500 Gets Late-Day Boost At End Of Wild Month: Markets Wrap

US stocks shook off another bout of volatility spurred by geopolitical anxiety and a White House shouting match to rally at the end of a jittery February.

Equities faced several twists and turns Friday. Plans to sign a minerals deal between the US and Ukraine were scrapped as Donald Trump's meeting with Volodymyr Zelenskiy devolved into a fiery exchange. Trump said Zelenskiy can come back when he's ready for peace. Meantime, Treasury Secretary Scott Bessent said Mexico has proposed matching US tariffs on China and urged Canada to do the same, signaling a potential path to avert levies.

Wall Street traders have seen a rise in equity swings amid a set of risks ranging from an economic slowdown, geopolitics, a trade war and lofty valuations.

“We think the bull market is intact. But we have also cautioned that volatility would likely be higher this year,” said David Lefkowitz at UBS Global Wealth Management. “Therefore, we have been highlighting that short-term hedges may be worth considering.”

To Jay Hatfield at Infrastructure Capital Advisors, while the market was rattled by the US-Ukraine headlines, the indication is that Trump will force peace - which is positive. To Matt Maley at Miller Tabak + Co., with so many different comments coming out of the White House, it's hard for investors to have a lot of confidence on the near-term outlook.

“This is a fragile market,” said Adam Phillips at EP Wealth Advisors. “We're bracing for additional volatility ahead as we await clarity on a long and growing list of issues.”

The S&P 500 rose 1.6% Friday, trimming its February losses. Treasuries extended this month's rally, with two-year yields dropping below 4%. A dollar gauge gained 0.3% on the last day of the week but finished lower for a second straight month.

Traders also watched closely a slew of headlines on tariffs.

“I do think one very interesting proposal that the Mexican government has made is perhaps matching the US on our China tariffs,” Bessent said on Bloomberg Television's Wall Street Week with David Westin.

“I think it would be a nice gesture if the Canadians did it also, so in a way we could have ‘Fortress North America' from the flood of Chinese imports,” he said.

A survey conducted by 22V Research shows there is no clear consensus on the odds of the Mexico and Canada tariffs going into effect next week. The median guess was 50% odds, but the distribution of responses is fairly flat.

“Net net, no consensus,” wrote Dennis DeBusschere, founder of 22V.

Wall Street got a degree of relief after data showed inflation isn't heating up - with equity traders looking past a worrisome decline in consumer spending to focus on prospects for Federal Reserve rate cuts. 

The January core personal consumption expenditures price index, which excludes food and energy items, rose 0.3% from December. From a year ago, it increased 2.6%, matching the smallest annual increase since early 2021. Inflation-adjusted consumer spending fell 0.5%, marking the biggest monthly decline in almost four years.

“While additional rate cuts are still probably many months away, we believe this report helps to keep one or two rate cuts on the table for 2025,” said Robert Ruggirello at Brave Eagle Wealth Management.

To David Russell at TradeStation, the PCE report provides a “little comfort” after the worrisome print on consumer prices.

“The drop in personal spending confirms the negative retail sales data we got earlier, suggesting the economy started 2025 on a soft footing,” he said. “Combined with the weak data so far in February, growth is becoming more of a concern for Wall Street.” 

Chris Zaccarelli at Northlight Asset Management says he's “still very cautious on the market given the high current valuations, the high policy uncertainty companies are forced to navigate and a consensus belief that recession risk is nonexistent (or extremely low).”

Corporate Highlights:

• Microsoft Corp. is signaling the end of the line for Skype, the iconic internet calling and chat service it bought almost 14 years ago.

• Bath & Body Works Inc., a retailer of personal care products, was upgraded at Citigroup Inc. in the wake of the company's results.

• Redfin Corp., an online real estate company, reported fourth-quarter results that were weaker than expected on key metrics and gave an outlook that is seen as disappointing.

• Rocket Lab USA Inc. delayed the launch of its Neutron rocket to the second half of the year and issued a revenue forecast for the first quarter which fell short of estimates. This prompted analysts to either lower or place their price targets under review.

Some of the main moves in markets:

Stocks

• The S&P 500 rose 1.6% as of 4 p.m. New York time

• The Nasdaq 100 rose 1.6%

• The Dow Jones Industrial Average rose 1.4%

• The MSCI World Index rose 1%

• Bloomberg Magnificent 7 Total Return Index rose 2%

• The Russell 2000 Index rose 1.1%

Currencies

• The Bloomberg Dollar Spot Index rose 0.3%

• The euro fell 0.2% to $1.0373

• The British pound fell 0.2% to $1.2579

• The Japanese yen fell 0.5% to 150.52 per dollar

Cryptocurrencies

• Bitcoin fell 0.2% to $84,138.87

• Ether fell 2.9% to $2,214.34

Bonds

• The yield on 10-year Treasuries declined five basis points to 4.21%

• Germany's 10-year yield was little changed at 2.41%

• Britain's 10-year yield declined three basis points to 4.48%

Commodities

• West Texas Intermediate crude fell 0.4% to $70.06 a barrel

• Spot gold fell 0.8% to $2,854.71 an ounce