US equity indexes experienced a slight increase after previously surrendering all intraday gains, following a tense Oval Office meeting between President Donald Trump and Ukraine's President Volodymyr Zelenskyy. This meeting reportedly ended with an exchange that left both leaders in a challenging position. The Nasdaq Composite saw a marginal rise of 0.1%, reaching 18,563.8.
The S&P 500 also climbed 0.1% to 5,868.5, while the Dow Jones Industrial Average made a similar gain, moving up 0.1% to 43,291.2 after the midday mark on Friday. All three indexes initially showed upward trends earlier in the trading session. This positive sentiment was supported by data from the Bureau of Economic Analysis, which indicated that the Federal Reserve’s preferred measure of inflation aligned with market expectations. However, after midday, sectors such as technology and healthcare turned negative, marking a stark contrast to the stronger performance seen earlier in the day when nearly all sectors were posting gains. During the meeting, Trump and Zelenskyy explored a proposal for the US to gain access to Ukraine's mineral resources in exchange for investments, along with what Kyiv hopes will be security guarantees.
Trump was quoted as telling Zelenskyy, "You're not really in [a] good position right now. You're gambling with World War III." Vice President JD Vance criticized Zelenskyy as being "disrespectful" for attempting to litigate the conflict publicly. In bond market news, US Treasury yields faced declines, with the 2-year yield dropping 5.6 basis points to 4% and the 10-year yield decreasing by 3.5 basis points to 4.23%.
This downward trend reflects changing investor sentiment, especially after the Oval Office exchange. The CBOE's volatility index, known as VIX, experienced a jump of 5.5%, reaching 22.30, marking the highest intraday level since mid-December. This increase in the VIX signals a shift in investor nerves following the meeting between the two leaders. Significantly, the personal consumption expenditures (PCE) price index noted a month-over-month rise of 0.3%, which was in line with expectations.
This increment has led to a year-over-year inflation rate decrease from 2.6% to 2.5%, paralleling December's growth rate. The core PCE price index equally rose by 0.3%, aligning with forecasts, attributed to a previous 0.2% gain in December. Lindsey Piegza, Chief Economist at Stifel, commented, "The latest read on prices — via the PCE — appears to be more reassuring of potentially reinstating a disinflationary trend or, at the very least, halting the recent upward trajectory following four consecutive months of escalating consumer and producer price growth." She also noted a budding concern over diminishing economic momentum coupled with apprehension about additional inflationary risks, particularly from forthcoming fiscal policies, including potential tariffs. Furthermore, the Institute for Supply Management's Chicago PMI registered a rise to 45.5 in February from January's 39.5, surpassing the anticipated reading of 40.8 from a Bloomberg survey. In corporate news, AES shares ($AES) surged 10% intraday, becoming the leading performer on the S&P 500 after reporting higher-than-expected adjusted earnings for Q4 and issuing an optimistic full-year guidance for 2025 that exceeded the average analyst estimates gathered by FactSet. Conversely, NetApp’s shares ($NTAP) faltered significantly, plummeting 17% intraday following disappointing quarterly results.
The company encountered unexpected challenges in fiscal Q3, with revenue falling at the lower end of guidance and muted expectations for recovery in Q4, as noted in a summary from Wedbush Securities. On the commodities front, West Texas Intermediate crude oil futures saw a decrease of 0.6%, priced at $69.94 a barrel.
Meanwhile, gold futures fell by 1.3% to $2,857.11, while silver futures dropped 1.5%, settling at $31.63..