Wall Street Finishes February on a High Note
U.S. stocks rallied on Friday, offering investors a brighter close to a turbulent February. The S&P 500 saw significant gains, and the Dow Jones Industrial Average experienced a substantial jump, indicating a positive shift in market sentiment.
Caption: The New York Stock Exchange. (AP Photo/Seth Wenig)
Market Performance
The S&P 500 increased by 1.6%, reducing its monthly loss, while the Dow Jones Industrial Average climbed 601 points, equivalent to a 1.4% rise. The Nasdaq composite also saw a positive performance, gaining 1.6%.
Factors Influencing the Rally
The recent market damage had particularly affected high-performing stocks in recent years, especially those associated with artificial-intelligence technology. Furthermore, Bitcoin experienced a significant decline. However, many of these previously struggling market segments rebounded on Friday, recovering some of their recent losses. Notably, Nvidia, a key stock in the market, saw a 4% increase following its Thursday dip, contributing significantly to the S&P 500’s overall performance. Bitcoin also recovered, trading above $84,000.
Economic Indicators and Federal Reserve
The market’s positive movement was influenced by an economic report released earlier in the day. This report revealed that inflation across the nation decelerated in line with economists’ expectations, a positive signal that could potentially allow the Federal Reserve to continue cutting its interest rates later in the year. However, the report also showed a decline in U.S. household spending in January. This is a concern because strong consumer spending has helped the U.S. economy avoid a recession despite high interest rates. Consumers had already shown signs of concern, with high inflation and worries about potential tariffs.
Impact of Tariffs
Concerns regarding tariffs, particularly those proposed by President Donald Trump, continue to weigh on the market. Wall Street hopes that these tariff discussions are merely a negotiating tactic and that they will be withdrawn, reducing potential negative impacts on the global economy. However, recent reports suggest that this talk has already led U.S. consumers to anticipate higher inflation.
Bank of America economists expressed concern that the market’s trust may erode if Trump does not pursue more market-friendly policies.
Company-Specific Performances
Several companies reported strong performances that contributed to the positive market trend. AES, an energy company, exceeded analysts’ profit expectations due to high demand from AI data centers and new U.S. manufacturing plants. Its stock price rose by 11.7%. Additionally, Signet Jewelers saw an increase of 5.2% after an investment firm acquired a significant stake, pushing for measures to boost the stock’s value. Dell, although reporting stronger profits than anticipated, experienced a revenue shortfall, leading to a 4.7% drop in its stock price.
Bond Market and International Markets
In the bond market, Treasury yields declined following the data on consumer spending and inflation. Furthermore, stock indexes in Asia decreased significantly due to ongoing tariff concerns. China’s Commerce Ministry criticized Trump’s decision to double tariffs on Chinese products.
Overall, the S&P 500 increased by 92.93 points, reaching 5,954.50. The Dow Jones Industrial Average climbed 601.41 points to 43,840.91, and the Nasdaq composite rose 302.86 points to 18,847.28.
AP Business Writers Matt Ott and Elaine Kurtenbach contributed to this report.
