The PULSE: Global Economic and Market News for Friday, February 14, 2025

As global markets closed on February 14, 2025, investors balanced optimism with growing caution. The S&P 500 ended virtually unchanged at 6,114.63, while the Dow Jones Industrial Average slipped 0.4% to 44,546.08. Meanwhile, the tech-heavy Nasdaq showed some resilience, gaining 0.4% to close above 20,000 for the first time this month. Despite mixed daily results, all three indexes posted weekly gains, with the Nasdaq leading at 2.58%, buoyed by strong earnings in the technology sector.

Yet, optimism in the markets was tested by fresh economic data. The U.S. Commerce Department reported a 0.9% drop in January retail sales, the most significant decline in nearly two years. Harsh winter weather and consumer uncertainty over impending trade tariffs were substantial factors behind the pullback. Despite a strong holiday season, this slowdown comes with December retail growth revised upward to 0.7%. Investors reacted swiftly to the disappointing data, driving Treasury yields lower, with the 10-year yield falling to 4.53%. The U.S. dollar followed suit, hitting a two-month low against the euro and yuan.

Adding to market jitters, President Donald Trump announced a new round of reciprocal tariffs, targeting countries that impose higher duties on U.S. goods. The move, aimed at “leveling the playing field,” is set to take effect on April 1. While details unfold, early reports suggest that China, Canada, and Mexico will face heightened scrutiny, though negotiations continue. Steel and aluminum tariffs remain at 25%, sustaining pressure on key industrial sectors. While some industries welcomed the tariff push, markets reacted uncertainly, fearing further disruptions to global supply chains.

Amid the policy shake-up, corporate earnings offered a mixed bag of results. Airbnb saw its shares surge on stronger-than-expected revenue, while GameStop jumped 9% on speculation about a potential investment in Bitcoin. On the downside, GoPro slumped 4%, underperforming the broader market as analysts raised concerns over slowing sales.

In the commodities market, Brent crude posted modest weekly gains as geopolitical tensions added to supply concerns. The U.S. ramped up efforts to curb Iranian oil exports, a move that could potentially reduce global oil supply and increase prices, prompting fears of tighter global supply. However, overall demand remains steady, balancing the potential supply disruption.

Globally, economic growth is losing steam. A new United Nations forecast projects a modest 2.8% global GDP expansion for 2025, with the U.S. and China slowing while India and Indonesia emerge as key growth drivers. Meanwhile, European markets surged on reports of a potential Ukraine ceasefire, a development that could reduce geopolitical tensions and boost investor confidence. This news, combined with short covering, which is when investors buy back stock they previously sold short to cover their positions, and easing geopolitical risks, helped drive investor confidence in the region.

As the week ended, markets found themselves at a crossroads. The rally in equities shows resilience, yet weak economic data, and looming trade uncertainties continue to weigh on investor sentiment. With key tariff decisions approaching and global economic momentum slowing, the coming weeks will test whether the markets can maintain their upward trajectory or whether volatility will retake center stage.

Disclosure

This article is for informational purposes only and does not constitute financial, investment, legal, or tax advice. The content provided is based on publicly available information as of February 14, 2025, from sources deemed reliable, including Reuters, MarketWatch, Financial Times, AP News, and other cited publications. However, the accuracy, completeness, and timeliness of this information cannot be guaranteed.

Past performance is not indicative of future results. Market conditions are subject to change, and investments in equities, fixed income, commodities, and other financial instruments carry inherent risks, including loss of principal. Readers should conduct their own due diligence and consult with a qualified financial professional before making any investment decisions.

Statements regarding economic forecasts, corporate earnings, policy developments, and market movements are forward-looking in nature and are based on current expectations and assumptions. Such statements are subject to risks and uncertainties that may cause actual results to differ materially. Factors that could affect outcomes include, but are not limited to, changes in interest rates, inflation, government policies, trade regulations, geopolitical events, and broader economic conditions.

Neither the author nor any affiliated parties hold positions in any securities mentioned in this article at the time of publication. The author is not compensated by any company or organization referenced in this article.

This article does not constitute an offer to buy or sell any securities. Investing involves risk, and readers should consider their individual financial situations, risk tolerance, and investment objectives before making any financial decisions.

Sources

·       U.S. Markets Performance: https://www.reuters.com/markets/global-markets-global-markets-2025-02-14/

·       Retail Sales Decline: https://www.reuters.com/markets/us/us-retail-sales-fall-sharply-january-2025-02-14/

·       Treasury Yields & The Dollar: https://www.reuters.com/markets/us/global-markets-view-usa-2025-02-14/

·       Trump's Tariff Announcement: https://www.thetimes.co.uk/article/which-countries-trump-reciprocal-tariffs-5w0gh9xvz

·       Airbnb Earnings Report: https://apnews.com/article/5359649681476af9c6f386769f99bdc8

·       GameStop's Cryptocurrency Consideration: https://www.investopedia.com/5-things-to-know-before-the-stock-market-opens-february-14-2025-11679907

·       GoPro Stock Performance: https://www.marketwatch.com/data-news/gopro-inc-stock-slides-4-0-underperforms-market-3203853a-d6dd771499ab

·       Oil Market Update: https://www.marketwatch.com/story/oil-prices-on-track-for-weekly-gain-as-tariff-fears-fade-8c411a00

·       Global Growth Outlook: https://apnews.com/article/a84d583b145ae6b5c00be581d4f6cf43

·       European Markets Rally: https://www.ft.com/content/04810b97-950e-4013-8040-12e692e18457

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