U.S. stocks resumed a COVID-19 relief and recovery rally in February with the S&P 500 solidly rebounding from January’s 1% loss. An impressive feat given back-to-back weekly losses during the second half of the month. Equities seesawed between bouts of heightened volatility a second straight month, this time stirred by a spike in U.S. Treasury yields that supported a rotation out of mega cap Technology into Small caps and Value-oriented companies. Investor sentiment was also supported by a trio of meaningful progress in COVID-19 vaccinations, expectations for a fresh large-scale fiscal stimulus package worth $1.9 trillion and reassurances from Fed Chairman Powell that the central bank will keep its accommodative, easy-money polices in place.
- The S&P 500 ended February 3.1% below its latest all-time high of 3,935 set on February 12.
- The Dow Industrials performed best in February at least among the three major U.S. indices, gaining nearly 975 points (+3.43%) last month. The Dow had reached a fresh record high of 31,962 on February 24.
- The tech-heavy Nasdaq Composite trailed, gaining 1.01% in February, having retreated 6.4% from its February 12 all-time high of 14,095.
- The yield on benchmark 10-year Treasury notes rose 38 basis points in February, its largest one-month yield gain since November 2016.
- Among major asset classes since the March 23, 2020 bear market low, the S&P 500 has risen 73.1%, the Bloomberg Barclays U.S. Aggregate Bond Index gained 4.1%, and the Bloomberg Commodities Index has climbed 37.5%.
The Monthly Recap is published by Cetera Investment Management LLC, an SEC registered adviser owned by Cetera Financial Group. Cetera Investment Management provides market perspectives, portfolio guidance, model management, and other investment advice to its affiliated broker-dealers, dually registered broker-dealers and registered investment advisers.
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