2025, Feb | Market Commentary

Summary

Market results were mixed in February. U.S. large-cap stocks ended the month down 1.3%, and U.S. small-cap stocks declined 5.3% while U.S. intermediate-term bonds gained 2.2%.
Consumer spending declined, but wages increased. Inflation remains persistently elevated.
It remains unclear how much of the decline in bond yields signals optimism about the Department of Government Efficiency’s impact on the deficit versus concerns over a growth slowdown caused by tariffs.
Treasury Secretary Scott Bessent is urging markets and consumers to bear the short-term pain of government spending cuts and tariffs for long-term gains stemming from the anticipated boost in domestic manufacturing and capital investment.