Today's War Room Trading Recap

On Friday, February 28, 2025, U.S. stock markets experienced a notable rally, concluding a turbulent month on a positive note. The S&P 500 advanced by 1.6% to close at 5,954.50, the Dow Jones Industrial Average rose 1.4% to 43,840.91, and the Nasdaq Composite climbed 1.6% to 18,847.28. This uptick helped mitigate earlier losses in February, which had been poised to be the worst since April 2024.

Divergence Among Indexes

Throughout the week, the major indexes displayed divergent performances. The S&P 500 and Nasdaq Composite faced weekly declines of 1% and 3.5%, respectively, primarily due to underperformance in technology stocks. In contrast, the Dow Jones Industrial Average managed a 1% gain for the week, buoyed by strength in financials and industrials.

Impact of Morning Economic Reports

Economic data released in the morning significantly influenced Friday’s market momentum. The Personal Consumption Expenditures (PCE) price index, the Federal Reserve’s preferred inflation gauge, indicated a slight deceleration in inflation, with a year-over-year increase of 2.5% in January, down from 2.6% in December. Additionally, consumer spending saw a decline, suggesting potential economic cooling. These indicators bolstered investor sentiment as they raised expectations for possible interest rate cuts by the Federal Reserve in the near future.

White House Meeting Between Trump and Zelensky

In the afternoon, a heated exchange between President Donald Trump and Ukrainian President Volodymyr Zelensky in the Oval Office introduced volatility into the markets. The confrontation, which centered around U.S. support for Ukraine amid its ongoing conflict with Russia, initially unsettled investors, leading to a brief sell-off. However, markets quickly rebounded as traders assessed the situation as political posturing rather than a substantive shift in policy. Analysts noted that while the exchange added to market jitters, it did not fundamentally alter the optimistic outlook driven by the morning’s economic data.

Despite geopolitical tensions and earlier economic concerns, the U.S. stock market ended the week on a firm footing, with positive economic indicators and resilient investor confidence paving the way for potential growth in the coming months.