February Commentary: Challenges, Opportunities & Global Market Shifts

I was reviewing headlines as I prepared this commentary and found myself overwhelmed with the amount of news that is coming at us at an unbelievable pace. It is truly dizzying; but we stay on top of it and keep marching on!!!

Market Performance Recap
February saw a shift in sentiment from the optimism at the start of the year, with U.S. equity markets experiencing a pullback:

• S&P 500: -1.7% in February, +1.4% year to date
• Nasdaq 100: -4.4% in February, -2.3% year to date
  • _{Source: YCharts as of February 28th}

In contrast, international equities posted gains:

• MSCI All Country World Index ex USA: +2.3% in February, +5.5% year to date
• MSCI Emerging Markets Index: +0.9% in February, +2.3% year to date
  • _{Source: YCharts as of February 28th}

Macroeconomic Overview
Several factors contributed to the negative shift in market sentiment:

• Inflationary Pressures: Inflation data came in hotter than expected, fueling concerns that price increases may persist. This raises the likelihood that the Federal Reserve will maintain higher interest rates for longer.
  • _{U.S. Bureau of Labor Statistics: https://www.bls.gov/cpi/}
• Slowing Growth Expectations: Economists have revised GDP growth forecasts downward due to potential economic headwinds, including tariffs, labor market disruptions, and corporate job cuts.
  • _{Barron’s: https://www.barrons.com/articles/economy-interest-rates-inflation-federal-reserve-tariffs-6a078bc3}
• Policy Uncertainty: Rapid shifts in government policies have introduced unpredictability, making it challenging for businesses to provide meaningful guidance and adjust their strategies.

International Markets Outperform
While U.S. markets struggled, international equities—both developed and emerging—posted solid gains. A notable factor was the decline in the U.S. dollar, which boosted returns for foreign stocks when translated back into dollar terms.

• _{CNBC: https://www.cnbc.com/2025/03/04/european-stocks-outperform-us-shares-in-february.html}

For over a decade, U.S. equities have outperformed their international counterparts. However, some market observers have long speculated that this trend could reverse. Is February the start of a more sustained shift toward international outperformance? Time will tell, and we will continue monitoring developments closely. If adjustments to portfolios are warranted, we will act accordingly.

The Federal Reserve: A Pivotal Year Ahead
The Fed finds itself in a delicate balancing act. Current market expectations suggest two rate cuts this year, but inflation will be a key determinant of whether these materialize. Additionally, signs of economic slowdown and job losses—particularly in the public sector—may also influence the Fed’s decision-making.

Historically, the Fed has tended to respond reactively rather than proactively. Given the current economic uncertainty, we anticipate continued market volatility as investors interpret incoming data and policy signals.

Navigating Market Volatility
After a period of relatively smooth gains, markets are now contending with a higher level of uncertainty. This is typical in the mid-cycle phase of a bull market, where volatility tends to increase as trends mature. While we view this as a normal and healthy part of market cycles, the speed and frequency of policy shifts introduce additional complexity.

The best approach? Stay disciplined. While volatility may feel disruptive, it also presents opportunities—whether through strategic portfolio adjustments or by taking advantage of mispriced assets.

A Balanced Perspective: What Could Go Right?
During periods of heightened uncertainty, investors often focus on downside risks. While risk management is essential, successful investing also involves identifying potential opportunities. Some possible positives include:

• Europe strengthening its economic position by reducing reliance on the U.S.
• The possibility of the U.K. reconsidering its position within the European Union.
• U.S. companies adapting to new trade policies, finding innovative workarounds.
• Small and mid-sized U.S. companies potentially benefiting from protectionist policies, leading to broader market participation.

Periods of market turbulence can be unsettling, but they also create openings for long-term investors. Staying patient, maintaining perspective, and capitalizing on dislocations can turn challenges into opportunities.

As always, we remain committed to guiding you through changing market conditions with a focus on long-term success. If adjustments to portfolios become necessary, we will act decisively and strategically.

Jordan Kaufman

Chief Investment Officer

Green Ridge Wealth Planning

Disclosure:
Green Ridge Wealth Planning, LLC is a registered investment adviser. The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment/tax advice. The investment/tax strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment/tax strategy for his or her own particular situation before making any investment decision(s). You are responsible for consulting your own investment and/or tax advisor as to the consequences associated with any investment.

The opinions referenced are as of the date of publication and are subject to change due to changes in the market or economic conditions and may not necessarily come to pass. Any opinions, projections, or forward-looking statements expressed herein are solely those of the AUTHOR, may differ from the views or opinions expressed by other areas of Green Ridge Wealth Planning, LLC, and are only for general informational purposes as of the date indicated.