The S&P/ASX 200 Index (ASX: XJO) is down 0.7% in afternoon trade on Friday.

Barring a last minute miracle, that means the benchmark Aussie index will have gone backwards over the month.

The ASX 200 closed out January at 8,532.3 points and currently stands at 8,194.6 points, down 4.0% in February.

Here's why the index has come under pressure.

Company earnings in the spotlight

It's important to remember that 14 February saw the ASX 200 notch a new all-time closing high, with the index having retraced 4.0% since then.

With the market at all-time highs, companies have been scrutinised this earnings season to judge whether they're deserving of their current valuations.

Now, a lot of companies not only lived up to market expectations, but exceeded them.

Like A2 Milk Co Ltd (ASX: A2M), for example.

Shares in the ASX 200 dairy stock have gained a whopping 35.6% over the month to the time of writing. Investors reacted positively to its half-year results, which included a 7.6% year on year increase in net profit after tax to NZ$91.7 million and saw management declare the first-ever A2 Milk dividend.

But if we turn our eye to the biggest three stocks on the ASX – namely Commonwealth Bank of Australia (ASX: CBA), BHP Group Ltd (ASX: BHP), and CSL Ltd (ASX: CSL) – we see all the behemoths ending the month in the red.

CBA shares look set to close the month down around 1.9%, while BHP shares are down 1.6%, and CSL shares have fallen 7.0% in February.

ASX 200 hampered by sticky interest rates

Also throwing up headwinds for the ASX 200 is the receding outlook for further interest rate cuts, both from the Reserve Bank of Australia and the US Federal Reserve.

The RBA delivered its first interest rate cut since November 2020 on 18 February, reducing Australia's official cash rate to 4.10%. Yet the benchmark index closed down 0.7% on the day as investors digested the central bank's cautious outlook for future cuts.

Citing "notable uncertainties", the RBA stated, "The forecasts published today suggest that, if monetary policy is eased too much too soon, disinflation could stall, and inflation would settle above the midpoint of the target range."

As for interest rates in the world's biggest economy, the Fed also appears increasingly willing to keep interest rates steady after a series of cuts in 2024.

Federal Reserve Bank of Philadelphia President Patrick Harker said yesterday (quoted by Bloomberg):

The policy rate remains restrictive enough to continue putting downward pressure on inflation over the longer term, as we need it to, while not negatively impacting the rest of the economy.

Trump tariffs and global uncertainty

The ASX 200 also hasn't gotten much relief amid rising uncertainty fuelled by the Donald Trump administration.

That also sees the S&P 500 Index (SP: .INX) down 3.0% this month, with US markets still having one full day of trade to go in February,

In the latest news, Trump said the US will press ahead with imposing 25% tariffs on Mexico and Canada on 4 March and will increase tariffs on Chinese imports by another 10%.

With the ASX 200 very exposed to energy and commodity prices, ongoing doubts remain about the potential impacts of Trump's policies on core Aussie exports like iron ore, copper, coal, oil, and gas.