The stock market is historically one of the best long-term investments.
Over the past century, the U.S. stock market (measured by the S&P 500) has delivered an
average annual return of around 10%, including dividends. This outpaces other asset
classes like bonds, gold, or real estate in terms of long-term growth. However, these returns aren’t smooth—
markets can go through wild swings, including crashes and prolonged periods of underperformance.
This shows why staying invested through market cycles can pay off, even if short-term
volatility can be unnerving!
Market Wrap
On Wednesday, February 5, 2025, U.S. stock markets closed higher, with the S&P 500 rising 0.4%, the Dow Jones Industrial Average gaining 0.7%, and the Nasdaq Composite increasing by 0.2%.
Investors weighed the prospect of future interest rate cuts from the U.S. Federal Reserve. The Institute for Supply Management reported that U.S. services sector activity unexpectedly slowed in January amid cooling demand, helping curb price growth. This slowdown led to speculation that the Fed might consider easing monetary policy sooner than anticipated.
Additionally, ongoing trade tensions influenced market sentiment. President Trump stated he was in no hurry to speak to Chinese President Xi Jinping to defuse a new trade war between the countries, adding uncertainty to the global economic outlook.
Despite these concerns, the market's resilience was evident as investors balanced economic data and geopolitical developments, leading to modest gains across major indexes.
Alphabet Inc.'s stock declined 7% after reporting fourth-quarter revenue of $81.62 billion, missing expectations of $82.82 billion. Slower growth in its cloud computing segment and a $75 billion AI investment plan raised concerns among investors.
Advanced Micro Devices' stock fell 6% following its earnings report. While profits met expectations, weaker-than-expected data center revenue of $3.86 billion, compared to forecasts of $4.09 billion, weighed on the stock.
Amgen's stock rose 6.5% after reporting adjusted earnings per share of $5.31, exceeding the $5.04 forecast. Growth in key products, including Repatha, and positive 2025 revenue guidance supported the stock's rise.
Johnson Controls' stock surged 11.1% after announcing Joakim Weidemanis as its new CEO and raising its 2025 profit forecast. Strong sales growth in its building solutions segment fueled the positive sentiment.
Super Micro Computer's stock rose 8% after announcing plans to ramp up AI data center infrastructure. Investors welcomed the focus on AI, anticipating future revenue growth from the initiative.
Match Group's stock fell almost 8% after issuing disappointing sales guidance and removing its CEO. Declining user engagement across platforms, including Tinder, raised concerns about future performance.
FMC Corporation's stock plunged 33% after forecasting weak first-quarter revenue due to unfavorable weather conditions and challenges in key markets affecting crop protection product sales.
Mattel's stock surged 15% after beating earnings estimates with net sales of $1.65 billion. Strong performance in the Hot Wheels brand and a $600 million share repurchase plan boosted investor confidence.
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