Most US stock indexes fell for a second straight week, though the Dow gained 0.95%. Growth stocks, especially tech giants, underperformed, with the Nasdaq seeing its worst weekly drop since September. NVIDIA fell 8.5% after its earnings report, raising concerns about AI-driven market momentum. Trade worries also weighed on stocks as Donald Trump reiterated plans for new tariffs by March 4. Inflation remains a challenge, with core PCE prices rising 2.6% y/y in January above the Fed’s 2% target. Consumer confidence dropped sharply, with expectations for the economy hitting recession-warning levels. GDP grew 2.3% in Q4, unchanged from prior estimates, but jobless claims rose to their highest since October. Treasury yields fell on weak economic data, lifting bond prices. Municipal bonds also gained but lagged behind Treasuries.

European stocks rose, with the STOXX Europe 600 up 0.6%, marking its longest winning streak since 2012. Strong earnings and defense stocks offset trade concerns. Germany’s DAX gained 1.2%, Italy’s FTSE MIB rose 0.6%, while France’s CAC 40 fell 0.5%. The UKs FTSE 100 led with a 1.7% increase. Inflation data was mixed – Germany’s held at 2.8%, while France’s dropped to 0.9%. GDP data confirmed contractions in Germany (-0.2%) and France (-0.1%). The ECB remained cautious on rate cuts despite confidence in inflation nearing 2%. In the UK, house prices rose 0.4% in January as buyers rushed to close deals before a tax hike. Lower borrowing costs also boosted demand.