Market Dashboard
New every Monday with last week’s recap and notes on the week ahead.
Last update: 2/24/2025
Shifting S&P 500 leaders, market declines, geopolitical tensions, lower consumer confidence and potential lower interest rates suggest continued uncertainty.
US Equities: Optimism amidst declines
- The markets: The S&P 500 declined 1.7% for the holiday-shortened week, closing at 6,013, while the Nasdaq fell 2.3%, and the Russell 2000 dropped 3.7%.
- The equal-weighted S&P 500 outperformed, rising +0.2%.
- Notably, short interest for the median S&P 500 stock increased to the highest level since 2020, signaling general bearish sentiment.
- Sectors: Utilities and Health Care were the strongest sectors, while Communication Services and Consumer Discretionary lagged.
- Geopolitical tensions and tariff uncertainty lifted gold prices to a new all-time high.
- Europe: Meanwhile, European equities saw $4 billion in inflows for the week, the most since February 2022, on optimism around peace negotiations.
US Economy: Uncertainty and divergence
- Sentiment: After reaching new record highs twice during the week, sentiment turned pessimistic Friday following weaker-than-expected economic data.
- The Citi Economic Surprise Index, a measure of economic news relative to market expectations, fell to a five-month low.
- Composite Purchasing Managers’ Index (PMI): S&P Global’s February Composite PMI recorded a 17-month low at 50.4 falling short of the consensus expectations of 53.0.
- Manufacturing and Services PMI: Notably, while the Manufacturing PMI showed a slight improvement for the second consecutive month, the Services sector experienced a contraction, marking its first decline in over two years with a drop to 49.7 from 52.9. This contraction in the Services sector suggests a slowdown in new order growth and a decline in business expectations, which are critical for sustained economic momentum.
US Treasuries: Declines
- 10-year: The 10-year Treasury yield has seen a decline for six consecutive weeks, settling at 4.43%, a decrease of 5 basis points.
- 2-year: Similarly, the 2-year yield has decreased by 6 basis points to 4.20%.
- This movement in Treasury yields is significant as it reflects broader economic sentiments and potential expectations for future monetary policy.
- Rate volatility: Despite uncertainty, rate volatility decreased as the macroeconomic backdrop suggests that central banks are likely to keep interest rates relatively stable in the near future.
Consumer Sentiment: Growing concerns
- Sentiment: The University of Michigan’s final Consumer Sentiment reading fell to 64.7 from 71.7 in January, as concerns over inflation and the economic outlook intensified.
- Inflation: While 1-year inflation expectations remained at 4.3%, 5-10-year inflation expectations rose to 3.5%, the highest level since 1995.
- Unemployment: Consumers' perceptions of current conditions and their expectations for the future have deteriorated. More than half of the survey respondents anticipate an increase in unemployment over the next year, a sentiment not seen since 2020. This pessimistic view towards employment could influence consumer spending and investment behaviors.
Looking ahead
- Shifting S&P 500 leaders: Notably, seven of the top 10 contributors to the S&P 500’s returns year-to-date are outside of the Magnificent Seven, suggesting shifting market leadership and raising questions on whether the rest of the index can sustain momentum without dependence on megacap tech.
- Adding to concerns, Walmart, one of the S&P 500’s top 10 contributors to returns year-to-date, issued lower guidance, raising doubts about consumer spending.
Housing and the Federal Reserve
- Housing: January existing home sales fell 4.9% month-over-month, the first decline since September.
- The Conference Board Leading Economic Index fell 0.3%, below expectations.
- Fed outlook: The Philadelphia Fed Business Outlook declined to 18.1 from 44.3 the prior month. January Federal Open Market Committee (FOMC) meeting minutes reinforced the Fed’s cautious, data-dependent stance as it awaits further clarity on Trump’s policies and economic conditions.
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Cross-Asset Performance Table
Returns and prices of the most popular indices and assets as of 02/21/25.
1) Annualized 3-year % return. 2) Option Adjusted Spread (OAS): OAS is a measurement of the spread of a fixed income security rate and the risk-free rate of return, which is adjusted to take into account an embedded option. Equity risk premium is the excess return that an individual stock or the overall stock market provides over a risk-free rate. The risk-free rate represents the interest an investor would expect from an absolutely risk-free investment over a specified period of time. Past performance is not indicative of future results.
S&P 500 Sector Performance
Utilities and Health Care were the strongest sectors, while Communication Services and Consumer Discretionary lagged.
Past performance is not indicative of future results.
Russell US Equity Style Performance
Small-caps underperformed large-cap equities.
Past performance is not indicative of future results.
US Equity Valuation
S&P 500 Equity Risk Premium
Bonds continue to appear more attractive than equities.
Past performance is not indicative of future results.
P/E Relative to Rest of World
The S&P 500 remains expensive relative to the rest of the world.
Past performance is not indicative of future results.
US Fixed Income Valuation
The 10-year yield decreased by 5 bp, to 4.43%, and the two-year yield decreased by 6 bp, to 4.20%.
†Interest Rate Volatility as measured by ICE BofAML Option Volatility Estimate Index (MOVE); *Mortgage-backed securities (MBS) are debt obligations that represent claims to the cash flows from pools of mortgage loans, most commonly on residential property. Mortgage loans are purchased from banks, mortgage companies, and other originators and then assembled into pools by a governmental, quasi-governmental, or private entity; **Options Adjusted Spread (OAS): A measurement of the spread of a fixed income security rate and the risk-free rate of return, which is adjusted to take into account an embedded option. Past performance is not indicative of future results.
Latest Economic Data
S&P Global’s February Composite PMI fell to 50.4, a 17-month low, and below consensus expectations of 53.0. While the Manufacturing PMI improved for a second month, Services fell into contraction for the first time in over two years, at 49.7 from 52.9. The report noted weaker new order growth and a decline in business expectations.
The Week Ahead
The week ahead brings Conference Board Consumer Confidence, Personal Income and Spending, and Personal Consumption Expenditures (PCE) data.
- Chicago Fed National Activity Index at 8:30 AM ET
- Dallas Fed Manufacturing Activity at 10:30 AM ET
- FHFA House Price Index at 9:00 AM ET
- Conference Board Consumer Confidence at 10:00 AM ET
- Richmond Fed Manufacturing Index at 10:00 AM ET
- The Home Depot, Inc. Reports Earnings
- New Home Sales at 10:00 AM ET
- Building Permits at 10:00 AM ET
- Nvidia Corporation Reports Earnings
- Salesforce, Inc. Reports Earnings
- Lowe’s Companies, Inc. Reports Earnings
- TJX Companies, Inc. Reports Earnings
- Initial and Continuing Jobless Claims at 8:30 AM ET
- Pending Home Sales at 10:00 AM ET
- Kansas City Fed Manufacturing Activity at 11:00 AM ET
- Personal Income and Spending at 8:30 AM ET
- PCE Price Index at 8:30 AM ET
- MNI Chicago PMI at 9:45 AM ET
- Berkshire Hathaway Inc. Reports Earnings
Index benchmarks
Cross-Asset Performance
S&P 500: A market capitalization-weighted index of 500 widely held stocks often used as a proxy for the stock market. It measures the movement of the largest issues. Standard and Poor's chooses the member companies for the 500 based on market size, liquidity and industry group representation. Included are the stocks of industrial, financial, utility, and transportation companies. Since mid-1989, this composition has been more flexible and the number of issues in each sector has varied. The returns presented for the S&P 500 are total returns, including the reinvestment of dividends each month.
Dow Jones Industrial Average: Computed by summing the prices of the stocks of 30 companies and then dividing that total by an adjusted value—one which has been adjusted over the years to account for the effects of stock splits on the prices of the 30 companies. Dividends are reinvested to reflect the actual performance of the underlying securities.
NASDAQ Composite: Measures the performance of all issues listed in the NASDAQ Stock Market, except for rights, warrants, units, and convertible debentures. Morningstar reports the NASDAQ Composite as a price return.
MSCI Europe IMI: This index captures large, mid and small cap representation across 16 Developed Markets countries in Europe. With 1,372 constituents, the index covers approximately 99% of the free float-adjusted market capitalization across the Developed Markets countries of Europe.
MSCI Japan IMI: This index is designed to measure the performance of the large, mid and small cap segments of the Japan market. With 1,134 constituents, the index covers approximately 99% of the free float-adjusted market capitalization in Japan.
MSCI EM (Emerging Markets) Index: A free float-adjusted market-capitalization index that is designed to measure equity market performance of emerging markets. The MSCI Emerging Markets Index consists of the following 23 emerging market country indexes: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Peru, Philippines, Poland, Qatar, Russia, South Africa, Taiwan, Thailand, Turkey and United Arab Emirates. For more information, visit the MSCI web site.
MSCI EAFE (Europe, Australasia, Far East) Index: A free float-adjusted market-capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. and Canada. The MSCI EAFE Index consists of the following 21 developed market country indexes: Australia, Austria, Belgium, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, the Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, and the United Kingdom. For more information, visit the MSCI website.
S&P 400 Index: This index provides investors with a benchmark for mid-sized companies. The index measures the performance of mid-sized companies, reflecting the distinctive risk and return characteristics of this market segment.
S&P 600 Index: This index measures the small-cap segment of the U.S. equity market. The index is designed to track companies that meet specific inclusion criteria to ensure that they are liquid and financially viable.
S&P 500 Growth: This index is a style-concentrated index designed to track the performance of stocks that exhibit the strongest growth characteristics by using a style-attractiveness-weighting scheme.
S&P 500 Value: This index is a style-concentrated index designed to track the performance of stocks that exhibit the strongest value characteristics by using a style-attractiveness-weighting scheme.
Bloomberg Commodity Index: Made up of 22 exchange-traded futures on physical commodities. The index currently represents 20 commodities, which are weighted to account for economic significance and market liquidity.
US Trade-Weighted Dollar Index: A weighted average of the foreign exchange value of the US dollar against a subset of the broad index currencies that circulate widely outside the US.
MSCI Emerging Markets Currency Index: sets the weights of each currency equal to the relevant country weight in the MSCI Emerging Markets Index.
Bloomberg US Aggregate Index: The US Aggregate Index covers the dollar-denominated investment-grade fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, MBS pass-through securities, asset-backed securities, and commercial mortgage-based securities. These major sectors are subdivided into more specific sub-indices that are calculated and published on an ongoing basis. Total return comprises price appreciation/depreciation and income as a percentage of the original investment. This index is rebalanced monthly by market capitalization.
Bloomberg US Corporate High Yield Bond Index: This index is composed of fixed-rate, publicly issued, non-investment grade debt.
S&P Sector Performance
The S&P 500 Consumer Discretionary sector comprises those companies included in the S&P 500 that are classified as members of the consumer discretionary sector.
The S&P 500 Consumer Staples sector comprises those companies included in the S&P 500 that are classified as members of the consumer staples sector.
The S&P 500 Energy sector comprises those companies included in the S&P 500 that are classified as members of the energy sector.
The S&P 500 Financials sector comprises those companies included in the S&P 500 that are classified as members of the financial sector.
The S&P 500 Health Care sector comprises those companies included in the S&P 500 that are classified as members of the health care sector.
The S&P 500 Industrials Sector comprises those companies included in the S&P 500 that are classified as members of the industrials sector.
The S&P 500 Information Technology Sector comprises those companies included in the S&P 500 that are classified as members of the information technology sector.
The S&P 500 Materials Sector comprises those companies included in the S&P 500 that are classified as members of the materials sector.
The S&P 500 Communications Services Sector comprises those companies included in the S&P 500 that are classified as members of the telecommunications services sector.
The S&P 500 Utilities Sector comprises those companies included in the S&P 500 that are classified as members of the utilities sector.
The S&P 500 Real Estate Sector comprises those companies included in the S&P 500 that are classified as members of the real estate sector.
US Equity Style Performance
Weekly and monthly style performance charts use Russell 1000, Russell Mid Cap, and Russell 2000 style indexes to represent large cap, mid cap, and small cap respectively.
Russell 1000: Consists of the 1000 largest companies within the Russell 3000 index. Also known as the Market-Oriented Index, because it represents the group of stocks from which most active money managers choose. The returns we publish for the index are total returns, which include reinvestment of dividends. Frank Russell Company reports its indexes as one-month total returns.
Russell 1000 Growth: Market-capitalization weighted index of those firms in the Russell 1000 with higher price-to-book ratios and higher forecasted growth values. The Russell 1000 includes the largest 1000 firms in the Russell 3000, which represents approximately 98% of the investable US equity market.
Russell 1000 Value: Market-capitalization weighted index of those firms in the Russell 1000 with lower price-to-book ratios and lower forecasted growth values. The Russell 1000 includes the largest 1000 firms in the Russell 3000, which represents approximately 98% of the investable US equity market.
Russell 2000: Consists of the smallest 2000 companies in the Russell 3000 Index, representing approximately 7% of the Russell 3000 total market capitalization. The returns we publish for the index are total returns, which include reinvestment of dividends.
Russell 2000 Growth: Market-weighted total return index that measures the performance of companies within the Russell 2000 Index having higher price-to-book ratios and higher forecasted growth values. The Russell 2000 Index includes the 2000 firms from the Russell 3000 Index with the smallest market capitalizations. The Russell 3000 Index represents 98% of the of the investable US equity market.
Russell 2000 Value: Market-weighted total return index that measures the performance of companies within the Russell 2000 Index having lower price-to-book ratios and lower forecasted growth values. The Russell 2000 Index includes the 2000 firms from the Russell 3000 Index with the smallest market capitalizations. The Russell 3000 Index represents 98% of the of the investable US equity market.
Russell Midcap: Measures the performance of the 800 smallest companies in the Russell 1000 Index, which represent approximately 25% of the total market capitalization of the Russell 1000 Index. As of the latest reconstitution, the average market capitalization was approximately $4.0 billion; the median market capitalization was approximately $2.9 billion. The largest company in the index had an approximate market capitalization of $12 billion.
Russell Midcap Growth: Market-weighted total return index that measures the performance of companies within the Russell Midcap Index having higher price-to-book ratios and higher forecasted growth values. The Russell Midcap Index includes firms 201 through 1000, based on market capitalization, from the Russell 3000 Index. The Russell 3000 Index represents 98% of the of the investable U.S. equity market.
Russell Midcap Value: Market-weighted total return index that measures the performance of companies within the Russell Midcap Index having lower price-to-book ratios and lower forecasted growth values. The Russell Midcap Index includes firms 201 through 1000, based on market capitalization, from the Russell 3000 Index. The Russell 3000 Index represents 98% of the of the investable U.S. equity market.
P/E Relative to Rest of World
TOPIX: This free-floated-adjusted index tracks all domestic companies of the exchange’s First Section.
US Fixed Income Valuation
ICE BofAML Option Volatility Estimate Index (MOVE): A yield curve-weighted index of the normalized implied volatility on one-month treasury option.
An investment cannot be made directly in a market index.