US stocks ended February with a strong rebound, overcoming weeks of volatility driven by geopolitical tensions, trade uncertainty, and White House turmoil. The S&P 500 jumped 1.6% on Friday, while the Dow Jones surged 601 points, helping trim the month’s losses. Treasury yields fell, with the two-year yield dipping below 4%, while the dollar, despite a daily gain, posted its second consecutive monthly decline.
Trade Tensions and Fed Rate Cut Speculation
Tariff talks took center stage after Treasury Secretary Scott Bessent mentioned that Mexico wants to match US tariffs on China and suggested Canada should do the same. His comments sparked market debate on whether these tariffs would actually be implemented.
A 22V Research survey revealed uncertainty about the likelihood of new tariffs being implemented.
Meanwhile, economic data provided relief, with the core PCE price index showing inflation remains stable. This reinforced hopes for Federal Reserve rate cuts, even as inflation-adjusted consumer spending declined 0.5%.
US Stocks Performance
The major indexes closed strong:
- S&P 500 +1.6%
- Nasdaq 100 +1.6%
- Dow Jones Industrial Average +1.4%
Weekly Market Performance
Despite the Friday rally, the weekly performance was mixed:
- S&P 500: -1.0%
- Nasdaq Composite: -3.5%
- Dow Jones: +1.0%
Friday’s Closing Levels
| Index | Close | Change | % Change |
| DOW JONES | 43,840.91 | +601.41 | +1.39% |
| S&P 500 | 5,954.50 | +92.93 | +1.59% |
| NASDAQ | 18,847.28 | +302.86 | +1.63% |
| US 10Y | 4.208% | – | – |
| VIX | 19.63 | -1.50 | -7.10% |
What Analysts Are Saying
- Bolvin Wealth Management Group (Gina Bolvin): The late-session rally was fueled by large dark pool activity at market lows, triggering algorithmic buying and a short squeeze. However, it’s unclear if this was profit-taking or new long positions, given that February’s last trading day often sees rebalancing.
- Political Risks on the Horizon: Trump’s growing alignment with Putin raises concerns for Ukraine, Europe, and global stability. Market participants are closely watching upcoming economic reports for further clarity.
US Stocks Outlook: What’s Next?
Key economic reports next week will shape market direction:
- Monday: Purchasing Managers’ Index (PMI) data from S&P Global and ISM
- Wednesday: Factory orders & durable goods data
- Friday: US payroll numbers
While Friday’s bounce was a positive sign, geopolitical and economic risks remain elevated. The next week will be crucial in determining whether this rally can hold or if fresh market pressures emerge.
Source: CBOE, Bloomberg
This commentary was written by James Gomes, a seasoned finance professional with over 30 years of industry experience, including a tenure exceeding 20 years at a prominent US bank.
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