U.S. Stocks Close Higher Amid Volatility, Zelensky and Trump Dispute Draws Market Attention
Last Friday (March 1), U.S. stocks closed higher after a day of intense volatility, as investors digested news of a dispute between Ukrainian President Zelensky and U.S. President Trump at the White House. The uncertainty surrounding Ukraine initially sparked a sell-off, but markets rebounded as investors calmly assessed the situation.
Zelensky and Trump engaged in a heated debate in front of global media and failed to reach an agreement on a U.S.-Ukraine joint development of natural resources, prompting Zelensky to leave the White House early. This incident heightened market concerns about U.S.-Ukraine relations and the prospects of the Russia-Ukraine war, coupled with uncertainties in U.S. inflation and economic growth, driving market volatility.
Adam Sarhan, CEO of 50 Park Investments, stated, “The on-site footage showed a tense situation, which led to market panic. But investors soon calmed down, allowing the market to recover post-sell-off.”
Tech Stocks Diverge, Dell Falls, NVIDIA and Tesla Lift Market
Regarding individual stock performance, technology stocks showed a split trend. Dell's shares fell 4.7% due to the company's forecast of a decline in adjusted gross margin for fiscal 2026. Its rival HP also dropped 6.8% due to quarterly profit forecasts falling short of market expectations.
On the other hand, both NVIDIA and Tesla rose nearly 4%, boosting the S&P 500 index. Overall, all 11 sectors of the S&P 500 index climbed, with the financial sector leading gains at 2.1% and consumer discretionary up 1.8%.
The market saw strong trading volume, with 17.5 billion shares traded on U.S. exchanges on Friday, surpassing the 20-day average of 15.4 billion shares, indicating active market trading.
Fed Policy in Focus, Inflation and Growth Contradictions Intensify
The latest economic data showed that U.S. January price increases met market expectations, but consumer spending fell 0.2% month-on-month in January after being revised up to a 0.8% increase in December. This data complicates market forecasts of Fed policy.
Peter Cardillo, chief market economist at Spartan Capital Securities, noted, “The data indicates a cooling economy while inflation remains, which presents a stagflation dilemma for the Fed.”
At the same time, market concerns persist over the Trump Administration's policy direction, especially regarding trade policy and potential tariff impositions. Sam Stovall, chief investment strategist at CFRA Research, said, “Tariff talks might pressure the stock market, and the market could be suppressed until policies are clarified.”
According to data from the London Stock Exchange Group (LSEG), the market expects the Fed might cut rates twice before December, but this expectation has changed little compared to before the economic data was released.
Market Volatility Increases, Fear Index Hits One-Month High
Amid rising market uncertainty, the CBOE Volatility Index (VIX), known as the “Wall Street Fear Index,” reached a one-month high, closing at 21.26 points. This reflects growing unease over global political and economic conditions.
In general, despite the brief market disturbance due to the U.S.-Ukraine leaders' dispute, investors ultimately returned to fundamentals, with U.S. stocks closing higher amid the volatility. Looking ahead, the market's focus remains on Fed policy, inflation trends, and the potential impact of the Trump Administration's economic policies.
