The stock market continued to rebound from its weak performance in December, as the S&P 500, Dow Jones Industrial Average (DJIA), Nasdaq, and Russell 2000 all climbed 3.0% or more in February. Year to date, the indices are up more than 11.0%. Small stocks appeared to outperform larger stocks, as the Russell 2000 rose 5.1%, outperforming its larger index peers during the month.
A number of factors may be credited to the strong February performance. Towards the end of January, the Federal Reserve paused its rate hike agenda until its next meeting. In addition, oil prices continued to climb from December lows, and there was increased optimism surrounding US and China trade relations. Towards the end of the month, President Trump agreed to delay an increase of tariffs that were set to be implemented March 1st.
While the year has started strong in terms of stock market returns, there is a degree of uncertainty regarding the outlook. Trade relations have dragged on over the last year, and it is all but certain that a deal will happen. Furthermore, global growth appears to be stalling, which may affect US markets.