Keep Calm and Stay Invested. History Suggests Patience During Geopolitical Uncertainty

Amid heightened scrutiny of AI-related capex, geopolitical tensions, and a hotter-than-expected inflation report late in the month, US large-cap equities came under pressure in February, with the Nasdaq 100 and S&P 500 declining 2.3% and 0.8%, respectively. However, market leadership continued to broaden beyond mega-caps, as the S&P 500 Equal Weight Index (+3.6%) outperformed its market-capweighted counterpart. International developed equities (+6.2%) led gains, followed by US mid-caps (+4.1%) and emerging market equities (+2.7%). Bonds mostly fared well as 7-10 year US Treasuries rose 2.5%, the US Aggregate Bond Index gained 1.6%, and Treasury Inflation Protected Notes increased 1.3%. Commodities produced positive returns as silver was up 12.7%, gold gained 8.7%, crude oil rose 3.1%, and broad-based commodities increased 0.4%.