WEEKLY MARKET RECAP – FEBRUARY 14, 2025

The S&P 500 and NASDAQ posted weekly gains, rebounding from two consecutive weeks of declines. The S&P 500 closed just four points below its record high from three weeks prior, while the NASDAQ and Dow remained about 1% below their all-time peaks.Wednesday’s Consumer Price Index report reinforced a trend of slightly stronger-than-expected inflation. Core inflation, which excludes food and energy, rose at an annual rate of 3.3% in January—exceeding economists’ forecasts and edging higher than the previous month’s figure.

Consumer spending saw a sharper-than-anticipated decline following the holiday season. January retail sales dropped 0.9% on a seasonally adjusted basis from the previous month, marking the steepest monthly decline in a year and falling well below economists’ expectations.

After underperforming U.S. markets in 2024 and much of the past decade, European stocks have outpaced their U.S. counterparts so far in 2025. By Friday’s close, a key European index had climbed over 12% year to date, while the S&P 500 had gained around 4%.

Gold surged to a record high on Friday amid volatile metals trading, briefly reaching $2,964 before retreating in the afternoon. Silver followed a similar pattern, spiking to $34 per ounce—its highest level in over a decade—before pulling back.

As earnings season nears its conclusion, corporate profits continue to surpass expectations. As of Friday, fourth-quarter net income for S&P 500 companies was projected to grow 16.9% year over year, based on reports from three-quarters of companies and estimates for those yet to announce results. Initially, analysts had forecast an 11.8% increase.

In congressional testimony, Federal Reserve Chair Jerome Powell emphasized the need for further progress in reducing inflation before considering additional interest rate cuts. However, he refrained from specifying the inflation level that would prompt the Fed to lower its benchmark rate, which has remained between 4.25% and 4.50% since December’s rate cut.

The United Kingdom’s economy narrowly expanded by 0.1% in the fourth quarter of 2024, surpassing expectations after stagnating in the previous quarter. The GDP report, released Thursday, came just a week after the Bank of England lowered its benchmark interest rate.