During a holiday-shortened week, the US S&P 500 Index dropped by 1.6% (though it’s up 2.4% year-to-date). After markets closed on Monday for Presidents’ Day, trading began on Tuesday with stocks initially climbing—pushing the S&P 500 to record highs on Tuesday and Wednesday. However, steep losses later in the week wiped out those gains, and major indexes ended lower. In this period, growth stocks fell further behind value stocks, while large-cap companies outperformed smaller ones. For example, the Russell 1000 Growth Index fell by 2.8% (up 0.9% YTD), the Russell 1000 Value Index dropped 0.9% (up 4.1% YTD), and the Russell 2000 Index declined 3.7% (down 4.1% YTD). Meanwhile, the tech-heavy Nasdaq Composite slipped by 2.5% (up 1.2% YTD).

In Europe, the MSCI Europe ex UK Index managed a modest 0.4% gain (up 10.6% YTD) amid cautious optimism as investors considered developments in US trade policy and efforts to resolve the Russia-Ukraine conflict. However, performances varied among major indexes: Germany’s DAX fell by 1.0% (up 11.9% YTD) ahead of its federal election, France’s CAC 40 slipped by 0.3% (up 10.6% YTD), while Italy’s FTSE MIB advanced by 1.2% (up 12.8% YTD). Switzerland’s SMI added 0.8% (up 11.7% YTD). The euro held steady against the US dollar, finishing the week at around USD 1.05 per EUR.

In the UK, the FTSE 100 dropped by 0.6% (with a 6.3% YTD gain), and the FTSE 250 fell by 1.4% (up only 0.2% YTD), while the British pound remained largely unchanged against the US dollar at about USD 1.26 per GBP.

Japan’s stock markets also slid during the week. The TOPIX Index declined by 0.8% (down 2.3% YTD) and the TOPIX Small Index fell by 2.2% (down 2.0% YTD), pressured by a stronger yen and rising yields on Japanese government bonds, with additional strain from US tariff threats.

In Australia, the S&P ASX 200 Index dropped by 2.7% (despite a 2.0% YTD gain), affected by a hawkish tone from the February RBA meeting, weak job market data, and disappointing earnings reports. Although Australian government bond yields increased, the yield curve remained mostly unchanged, and the Australian dollar strengthened by 0.5% against the US dollar.