Traders work at the New York Stock Exchange on Feb. 26, 2025.
NYSE
The S&P 500 traded into the red on Friday as President Donald Trump and Ukraine President Volodymyr Zelenskyy clashed in the Oval Office, raising concerns about rising geopolitical risks.
The S&P 500 was lower by a few points, giving up a solid gain of 0.7% earlier in the session. The Dow Jones Industrial Average was flat after adding more than 300 points earlier. The Nasdaq Composite was flat.
The major benchmarks traded lower as the Trump, along with Vice President JD Vance, argued with Zelenskyy during an extraordinary moment in front of the media at the White House. The leaders met Friday regarding a possible Ukraine mineral rights deal for the U.S., which investors hoped would be a precursor to eventually bringing about an end to the war with Russia.
“You either make a deal or we’re out,” said Trump at one point to Zelenskyy. “You’re gambling with World War III.”
The Cboe Volatility Index, a gauge of fear on Wall Street, traded higher as the fight unfolded.
“I’m disturbed by what I just saw,” said investor Jim Lebenthal of Cerity Partners on CNBC’s “Halftime Report.” “If the policies in foreign affairs is now to empower Russia and Vladimir Putin, I don’t think that’s good for the stock market. I don’t think that’s good for the global economy. I find it hard to make a case otherwise.”
Month to date, the Nasdaq has led the way down, sliding around 5% in February due largely to a 4.6% drop this week. The technology-heavy Nasdaq is on pace for its worst month since September 2023.
The S&P 500 has declined 2.1% for the week and around 2.6% in February. The broad market index is on track for its worst week since September 2024, and biggest monthly decline since April 2024. Year to date, it is now trading nearly 0.1% in negative territory. Meanwhile, the Dow is unchanged for the week. Month to date, however, the 30-stock index has dropped 2.5%.
The latest PCE reading showed that inflation eased slightly in January, according to a report from the Commerce Report. The PCE price index, which is the Federal Reserve’s preferred inflation measure, increased 0.3% for the month and 2.5% on an annual basis.
Core PCE, which excludes volatile food and energy prices, also rose 0.3% for the month and 2.6% year over year. The numbers all came in as expected with Dow Jones consensus estimates.
“This release most likely keeps the Fed in a pause mode for the near term. We still believe that we need to see softer inflation data or weaker unemployment data for the Fed to start cutting again,” said John Lloyd, portfolio manager at Janus Henderson. “The path for policy rates over the next year is certainly more difficult to forecast as the economy and markets will be impacted by governmental policy decisions in the US and around the world.”
Investors have been rattled in recent days by President Donald Trump’s promise of tariffs and recent economic reports flashing warning signs. A decline of 8.5% in megacap tech titan Nvidia in Thursday’s session following its quarterly earnings report threw more cold water on investor sentiment.
On Friday, the Atlanta Fed’s GDP Now measure, which tracks economic data in real time and adjusts continuously, adjusted to forecast first-quarter output falling by 1.5%.
“February is seasonally a volatile period of time for stocks, and that historical trend is playing out right now,” said Michael Landsberg, chief investment officer at Landsberg Bennett Private Wealth Management. “Investors are in search of more clarity on tariffs, elevated inflation and the state of the consumer.”
