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In this brief market report, we will take a look at the various asset classes, sectors, equity categories, ETFs, and stocks that moved the market higher, as well as the market segments that defied the trend by moving lower. Identifying these pockets of strength and weakness can often allow us to see the direction of significant money flows, along with their origin.

After Making a New High on Wednesday, the Market Stumbled

How bad was Friday's drubbing? In the context of historical daily returns, it wasn't that bad. However, it certainly drew attention.

Image Source: ZenInvestor.org

A Look at Monthly Returns

The following chart shows the monthly returns for the past year. Friday's decline knocked us into the red for the month of February. Since Donald Trump was elected, the market has moved up by 1.4%.

Image Source: ZenInvestor.org

A Look at Drawdowns This Year

Here is a closer look at the pullbacks we've seen over the last 12 months, using a drawdown chart. The current drawdown is 2.1% following the new high on Wednesday.

Image Source: ZenInvestor.org

A Look at The Bull Run Since it Began Last October

This next chart highlights the 68.1% gain in the S&P 500 from the October 2022 low through Friday's close. It came to rest below the trendline, and it looks like there may be further to go before this pullback is over.

Image Source: ZenInvestor.org

Major Asset Class Performance

Here is a look at the performance of the major asset classes, sorted by last week's returns. I also included the returns seen since the Oct. 12, 2022 low for additional context.

The best performer last week was the Asia 50 asset class, led by China. The worst performer was the Blockchain, as Bitcoin ended the week at around $95,600. That's notably down from the recent high of $108,100.

Image Source: ZenInvestor.org

Equity Sector Performance

For this report, I use the expanded sectors as published by Zacks. They use 16 sectors rather than the standard 11. This gives us added granularity as we survey the winners and losers.

It looks like investors were buying defensive sectors like Utilities and Consumer Staples, while selling Retail and Transportation stocks.

Image Source: ZenInvestor.org

Equity Group Performance

For the groups, I separate the stocks in the S&P 1500 Composite Index by shared characteristics like growth, value, size, cyclical, defensive, and domestic vs. foreign.

The best performing groups last week were emerging market stocks and US defensive stocks. Investors raised cash by selling small- and mid-cap growth stocks, as well as the Magnificent 7 group of stocks. 

Image Source: ZenInvestor.org

The S&P Mag 7

Here is a look at the seven mega-cap stocks that have been leading the market over the past two years. These seven stocks have been off to a weak start year-to-date. Faith in the AI trade is seemingly being tested. Participation in the bull market has broadened on a year-to-date basis. Meta Platforms (META) was the hardest-hit, while Apple (AAPL) managed to eke out a small gain for the week.

Image Source: ZenInvestor.org

The S&P Top 7's Dominance is Reasserting Itself

After leading the market higher for the last two years, the Magnificent 7 stocks now seem to be a drag on the S&P 500 index on a year-to-date basis. 66% of all stocks in the S&P 1500 were down last week, 30% were up, and 4% were unchanged.

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The 10 Best-Performing ETFs From Last Week

The two biggest winners this week, emerging market internet stocks and gold, demonstrate how market leadership is changing in 2025. 

Image Source: ZenInvestor.org

The 10 Worst-Performing ETFs From Last Week

It's no surprise to see the ARK ETFs taking the top slots on the worst-performing ETF list, as these funds tend to bounce from big losses one week to big gains the next. Investing in ARK funds is not for the faint of heart.

Image Source: ZenInvestor.org

Best-Performing Stocks

Celsius (CELH) spiked on better-than-expected earnings and a $1.8 billion acquisition.

Image Source: ZenInvestor.org

Worst-Performing Stocks

Trupanion Inc. (TRUP) lost 1/3rd of its value after an earnings miss.

Image Source: ZenInvestor.org

Final Thoughts

To recap, in the past week, investors were doing the following:

• Selling small-cap growth stocks and buying large-cap value stocks
• Selling blockchain assets and buying China stocks
• Selling fintech assets and buying gold
• Selling retail stocks and buying utilities stocks
• Selling US stocks and buying foreign stocks

My view is that long-term momentum is still healthy, but there will be pullbacks like this along the way -- maybe even a 10% correction -- until we get more clarity about tariffs and inflation. Therefore, I'm advising clients to wait for deeper pullbacks to put fresh cash to work.

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