February Market Update

March 20, 2025

Market Indices Performance

December 2024 Market Indices Performance


February Recap


The S&P 500 fell 1.3% in February; International stocks outperformed again and have been the clear leader in 2025 so far after years of underperformance.(1) The yield on the 10yr Treasury continued to slide in February as investors curbed future growth expectations. Inflation, measured by the Consumer Price Index (CPI), rose 2.8% from last year, marking the 48th straight month above the Federal Reserve’s 2% target. However, the 0.2% month-over-month number was a welcome decrease from previous months (figure 1).(2) The economy added 150k jobs in February and the unemployment rate ticked slightly higher to 4.1%, marking its 10th straight month in the 4.0%-4.3% range.(3) Job openings creeped higher to 7.7m, and the ratio of jobs available to unemployed people remains healthily above 1.(4) All this points to a continually strong labor market, even with recession talks reigniting as investors fear a potential trade war.

Figure 1. CPI month-over-month inflation past 12 months


The Present


Q4 2024 earnings season ended with 18% growth, higher than the 12% expected.(5) Despite this, the S&P 500 entered correction territory (a 10% drop from all-time highs), following the Nasdaq and small/mid caps after several highly volatile trading sessions. While tariff uncertainty, stretched valuations, and declining growth expectations (Q1 2025 GDP is now forecasted to be negative) merit a drop, we also see this as a healthy, even necessary, pullback after impressive gains since the last correction in October 2023 (figure 2).(6) Despite this market volatility, Treasury yields have remained relatively stable in March.(7) Mortgage rates have bounced between 6%-8% since the beginning of 2023, and now sit around 6.5%.(8) 

Figure 2. Index returns since the bottom of the last correction, 10/27/23


The Future


Analysts predict earnings growth of 7% for Q1 2025 and 12% for all of 2025, with growth finally widening out from the Big Tech names.(5) Wall Street is now expecting 3 interest rate cuts this year, while the Federal Reserve’s latest prediction was 2; Chairman Jerome Powell said they are in no hurry to cut.(9,10) March is historically an average month for the stock market.(11) Trump’s tariffs have begun, notably with a 25% tariff on all goods from Canada and Mexico. Several product-specific tariffs as well as reciprocal tariffs are set to begin on April 2nd, barring another delay.(12) The market has not liked this uncertainty, but the Trump administration sees this short-term pain as a worthy price to pay for long-term gain. 




1. https://ycharts.com/indices/%5ESPXTR, https://ycharts.com/indices/%5EDJITR, https://ycharts.com/indices/%5ENACTR, https://ycharts.com/indices/%5ERUTTR, https://ycharts.com/indices/%5EMSEAFETR, https://ycharts.com/indices/%5EBBUSATR – Index Performance

2. https://www.bls.gov/news.release/pdf/cpi.pdf - CPI

3. https://www.investing.com/economic-calendar/nonfarm-payrolls-227 - Jobs reports

4. https://fred.stlouisfed.org/graph/?g=12kNG - Job openings

5. https://advantage.factset.com/hubfs/Website/Resources%20Section/Research%20Desk/Earnings%20Insight/EarningsInsight_031425.pdf - Earnings expectations

6. https://www.atlantafed.org/cqer/research/gdpnow - GDP estimates

7. https://www.cnbc.com/bonds/ - Treasury yields

8. https://fred.stlouisfed.org/series/MORTGAGE30US - Mortgage Rates

9. https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html – Investor rate expectations

10. https://www2.deloitte.com/us/en/insights/economy/spotlight/fed-rate-cuts-and-us-labor-market-trends.html - Fed Outlook

11. https://www.nasdaq.com/articles/heres-the-average-stock-market-return-in-every-month-of-the-year – Monthly market history

12. https://www.tradecomplianceresourcehub.com/2025/03/13/trump-2-0-tariff-tracker/ - Trump tariffs




The Gasaway Team


7110 Stadium Drive

Kalamazoo, MI 49009

(269) 324-0080

FAX (269) 324-3834


The views expressed are those of the author as of the date noted, are subject to change based on market and other various conditions. This presentation is not an offer or a solicitation to buy or sell securities. The material discussed is meant to provide general education information only and it is not to be construed as specific investment, tax or legal advice and does not give investment recommendations.


Certain risks exist with any type of investment and should be considered carefully before making any investment decisions. Keep in mind that current and historical facts may not be indicative of future results.


Additional information, including management fees and expenses, is provided on our Form ADV Part 2 available upon request or at the SEC’s Investment Adviser Public Disclosure website, https://adviserinfo.sec.gov/firm/summary/123807.


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Turbulent times can bring turbulent markets. Many factors cause chaotic swings in the investing world including housing, political elections, and international instability. Despite the financial queasiness this can have, experts consistently have one piece of advice for investors: stay calm and stay the course. Maintaining a long-term investment strategy can help weather the storm of a volatile stock market, whereas reacting irrationally or panicking is the last thing investors should do. History tends to repeat There are a few ways to keep nerves at bay amidst a sea of daunting headlines. First, a historical review shows that market fluctuations are normal. This should serve as a comforting reminder during unstable conditions. According to Fidelity, “...while market downturns may be unsettling, history shows stocks have recovered and delivered long-term gains.” 1 While no one can predict the stock market with absolute certainty, the significant crashes of the last century all saw periods of recovery. For example, after the 2008 market crash, the recovery began almost immediately and achieved an eventual increase of 178% in 5-year returns. 2 These past events reinforce the importance of focusing on long-term financial strategies and goals, not short-term fluctuations. The markets will have bull and bear runs which need time to play out without trying to anticipate short-term trends. However, past performance is no guarantee of future results. Don’t try to catch a falling knife Another potential mistake that investors can make is to stop saving during a market downturn. A popular way to continue savings momentum when nerves are being tested is dollar-cost averaging , or in other words, investing a fixed amount on a regular schedule (e.g., per pay period) that generally results in buying more shares when prices are low and less shares when they are high. Dollar-cost averaging is a stabilizing approach. It can take away some of the fear of timing risk and become less of a system shock than lump sum investing. However, this strategy does not ensure a profit and does not protect against loss in declining markets. You need lemons to make lemonade Downturns are a perfect time to consult with a financial professional or investment advisor to review different strategies and also rebalance your portfolio. It might be time to look at investments 1 Fidelity Viewpoints. “6 Tips to Navigate Volatile Markets.” Fidelity. 6 March 2025. 2 Fidelity Viewpoints. “6 Tips to Navigate Volatile Markets.” Fidelity. 6 March 2025. that have lost value, which can potentially help manage risk exposure and provide an opportunity to reposition the portfolio for recovery. Another possibility is to consider a Roth conversion. If your plan allows for a Roth conversion - moving money from pretax dollars to Roth dollars - then a downturn could help. A conversion in a downturn might result in a lower tax bill for the same number of shares sold, and then the individual can experience the benefits of a Roth account, allowing qualified distributions of future growth to be tax free.3 Market downturns are a part of any investing lifecycle so it’s best to keep a steady hand, consult with your advisor and consider all options so you can weather through this market cycle - and the next one. Information provided herein is not, and should not be regarded as, investment advice or as a recommendation. Investing involves risk, including potential loss of principal. ________________________________________ The Gasaway Team Gasaway Investment Advisors 7110 Stadium Dr., Kalamazoo, MI, 49009 Email: info@gasawayinvestments.com Phone: (269) 324-0080 Website: www.gasawayinvestments.com This information is provided as a general guide to educate plan sponsors. It is not intended as authoritative guidance or tax/legal advice. Each plan has unique requirements, and you should consult your attorney or tax advisor for guidance on your specific situation. ©401(k) Marketing, LLC. All rights reserved. Proprietary and confidential. Do not copy or distribute without permission. ________________________________________ Content is for educational purposes only and should not be construed as a solicitation or offer to sell securities or provide investment, tax, or legal advice. Past performance is not indicative of future results. Investing involves risk, including the potential loss of principal. Always consult with a qualified financial advisor before making any investment decisions. Additional information, including management fees and expenses, is provided on our Form ADV Part 2 available upon request or at the SEC’s Investment Advisor Public Disclosure Site https://adviserinfo.sec.gov/firm/summary/123807 . 3 Fidelity Viewpoints. “6 Tips to Navigate Volatile Markets.” Fidelity. 6 March 2025.
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