S&P 500 surges more than 1% Friday to end stormy February as investors look past Trump-Zelenskyy clash

On Friday, February 28, 2025, the S&P 500 surged 1.6%, closing at 5,954.50, as investors chose to overlook geopolitical tensions arising from a heated exchange between U.S. President Donald Trump and Ukrainian President Volodymyr Zelenskyy. This rally marked a positive end to a volatile month, with the Dow Jones Industrial Average rising 1.4% to 43,840.91 and the Nasdaq Composite climbing 1.6% to 18,847.28.

The day began with optimism fueled by reports of easing inflation and a slight deceleration in consumer spending, which suggested that the Federal Reserve might pause its interest rate hikes. This sentiment was bolstered by a decrease in Treasury yields, further enhancing investor confidence.

However, geopolitical concerns briefly rattled the markets. President Trump’s Oval Office meeting with President Zelenskyy devolved into a contentious confrontation, with Trump accusing Zelenskyy of “gambling with World War III” by not pursuing peace with Russia. The meeting, initially intended to discuss a mining deal, escalated when Vice President JD Vance criticized Ukraine’s approach to the ongoing conflict, leading to an abrupt end without a planned press conference.

Despite the immediate market dip following the diplomatic clash, investors quickly refocused on domestic economic indicators. Analysts noted that the resilience of the U.S. economy and the positive inflation data outweighed concerns over international disputes. This perspective was evident as traders capitalized on the brief downturn, leading to a robust market rebound.

Sector-wise, all 11 S&P 500 sectors experienced gains. The financial sector led the charge with a 2.1% increase, followed by consumer discretionary stocks, which rose by 1.8%. Notable contributors included Nvidia, which recovered from previous losses, and AES Corporation, which saw an 11.7% surge due to strong earnings reports. Edison International also climbed 6% after news regarding a wildfire insurance fund, while Erie Indemnity advanced 5.7% on robust earnings.

Conversely, some companies faced challenges. NetApp Inc. experienced a 15.6% decline due to underwhelming revenue figures, and HP Inc. dropped 6.8%, influenced by concerns over potential tariff increases. These declines, however, were overshadowed by the overall market uptrend.

For the week, the S&P 500 recorded a 1% decline, while the Nasdaq Composite fell by 3.5%. The Dow Jones Industrial Average, however, managed a 1% gain for the week. Despite the positive close on the last trading day, February concluded with the S&P 500 down 1.45%, the Dow decreasing by 1.6%, and the Nasdaq experiencing a more significant 4% drop, marking its worst monthly performance since April 2024.

Investors’ ability to look past the Trump-Zelenskyy clash underscores a broader market trend of focusing on domestic economic health over geopolitical disturbances. While international events can introduce volatility, the underlying strength of the U.S. economy often serves as a stabilizing force. This resilience suggests that, barring significant escalations, markets may continue to prioritize economic indicators over political discord.

In summary, the S&P 500’s 1.6% surge on February 28, 2025, highlights investor confidence in the face of geopolitical tensions. Positive economic data, particularly regarding inflation and consumer spending, played a pivotal role in bolstering market sentiment. As the global landscape remains complex, market participants appear poised to navigate challenges by focusing on fundamental economic strengths.