March 10, 2025
Last week brought heightened uncertainty over tariffs and their ultimate effects, along with a jobs number that fell short of expectations. Read on for a bite-sized summary of what you should know heading into a new week.
Weekly Stock Index Performance
Major U.S. stock market indexes declined for the week ending March 7th:
- The S&P 500 decreased by 3.10%.
- The Nasdaq 100 traded lower by 3.27%.
- The Dow Jones Industrial Average fell by 2.37%.
Fluid Tariff Situation
- Tariffs were enacted last week, with Mexican and Canadian imports facing 25% duties. However, just two days later, tariffs on certain goods imported from Mexico and Canada were dialed back — set to remain tariff-free until April 2, 2025. Tariffs on Chinese imports doubled.
- The virtually nonstop uncertainty over tariffs has soured market sentiment over the past few weeks. While major U.S. stock indexes are well off their all-time highs, let’s be mindful that, as of last week’s market close, the S&P 500 is close to where it traded as November 2024 began.
Payrolls Miss
- As a tough market wore on last week, attention turned to Friday’s jobs number for a potential reprieve. 151,000 jobs were created in February, falling short of expectations for 170,000. So no love there.
- Yet, the S&P 500 managed to put together a positive trading session on the day of the payrolls data release to close out last week. Federal Reserve Chair Jerome Powell mentioned that the economy is in good shape after the S&P 500 flirted with its 200-day moving average — a key technical level — earlier in the day and closed above it.
Market Psychology, Opportunity?
- For the market historians and technicians among us, there is some interesting data on the S&P 500 and the 200-day moving average. Of course, market timing is challenging and is deemed second place to time in the market.
- From a psychological perspective, let’s remember that the tariff announcements are not a surprise (compared to an unknown event like COVID-19, for example). Tariffs were well broadcasted in advance. However, the way the tariffs get implemented, their timelines, and their ultimate effects are somewhat unknown.
- A broader and deeper pullback could create opportunities for certain long-term investors.
The Week Ahead
- Don’t look now, but here comes Consumer Price Index (CPI) on Wednesday. Core CPI was running at a 3.3% annualized rate and 0.40% monthly rate in January, so market watchers will want to see if this hotter-than-expected inflation data carried into February.
- The Cleveland Fed’s Nowcasts Tool shows expectations for a monthly rise of 0.23% in Headline CPI and a 0.27% monthly rise in Core CPI as of last week’s market close, so a little bit of month-over-month inflation cooling is expected.
That’s it for this week’s update! If you’d like to explore any of these topics further or have any other questions or needs, don’t hesitate to reach out.
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