Geopolitical and macroeconomic ups and downs resulted in a mixed set of returns in global markets for the month of February.

In the UK, large cap stocks measured by the FTSE 100 index continued their strong start to the year as the index gained a further 2%. However medium and smaller companies fared less well, not helped by UK inflation data coming in stronger than expected at 3% according to the Consumer Prices Index. European stocks brushed off Trump’s tariff threats with both the large-cap Eurostoxx 50 index and the broader Stoxx Europe 600 index both rising over 3%.

The US market performed less well during the month, with the S&P 500 slipping more than 1%. The decline was led by the ‘Magnificent Seven’ tech stocks amidst doubts over whether their earnings could be sustained. The Bloomberg Magnificent 7 Total Return Index plunged more than 8% in February – its worst monthly return for over two years. Tesla suffered the biggest drop as its shares fell 27%, reversing much of the stock’s post-election rally.

Full round-up of February market performance

In the UK, the FTSE 100 index gained 1.99% while medium and smaller companies, measured by the FTSE 250 ex IT index and the FTSE Small Cap ex IT index respectively, declined 3.38% and 5.02%. In the US, the S&P 500 USD index fell 1.30% while in Europe the Eurostoxx 50 EUR index rallied 3.48%. Japanese stocks measured by the Topix JPY index dropped 3.79%.

Emerging markets returns were mixed, with the MSCI Emerging Markets index returning 0.75% in local currency terms. Latin American equities, measured by the MSCI Latin America local currency index, lost 1.89% while Indian stocks measured by the Nifty 50 INR index shed 5.89%. However Chinese stocks measured by the MSCI China CNY index surged 11.59%.

In the fixed income market, UK government bonds, measured by the FTSE Gilts All Stocks index, gained 0.76% with long dated (over 15 years to maturity) gilts rising 1.09%. Sterling denominated corporate bonds, measured by the Markit iBoxx Sterling Corporates index, gathered 0.48%. In the high yield market, the ICE Bank of America Sterling High Yield index picked up 1.26%.

In the commodities market, the S&P GSCI USD index, which consists of a basket of commodities including oil, metals and agricultural items, declined 1.34%. Brent crude oil futures lost 3.82% during the month. In the precious metals markets, the S&P GSCI Gold and Silver indices returned 0.81% and -2.99% in USD respectively, while in the agricultural markets corn and wheat futures sank 5.91% and 4.02% in USD respectively.

In currency markets, it was a mixed month for the pound as it appreciated 1.47% versus the US dollar and 1.37% against the euro but relinquished 1.53% versus the Japanese yen.