March 17, 2025
Last week brought heavy news flow out of Washington (shutdown averted!), while monthly inflation data showed some cooling. Amid all of the headlines, now is a good time to share an overview of what happened and what’s ahead. Read on for a bite-sized summary of what you should know.
Weekly Stock Index Performance
Major U.S. stock market indexes fell decidedly for the week ending 03/14, although they settled the week well off the lows courtesy of a big rally last Friday.
- The S&P 500 decreased by 2.27%.
- The Nasdaq 100 traded lower by 2.46%.
- The Dow Jones Industrial Average fell by 3.07%.
News Flow Heaviness
- A potential partial government shutdown was in play last week as major stock indexes touched correction territory, with some heated exchanges among lawmakers on Capitol Hill over the spending bill. However, the Senate passed the spending bill, and the shutdown was averted.
- Economic data and Fed talk still flow, yet are buried beneath continuing tariff volatility daily. Perhaps market sentiment reached short-term oversold levels, contributing to last Friday’s rally.
Inflation Cools
- It might not seem like it, but there was some good news on inflation last week. Consumer Price Index (CPI) cooled more than expected in February. The data released last Friday showed consumer prices rose by 2.8% vs. 2.9% expected year-over-year; it also showed a 0.2% increase month-over-month vs. 0.3% expected. Good, right? Yet major stock indexes sold off heavily on the data release day, heading higher the following day.
- On the wholesale side of inflation, expectations were for an increase in February, and the data showed no change month-over-month, with Core PPI coming in two ticks below expectations on a monthly basis. Inflation cooled on both the consumer and wholesale side in February.
Not-So Golden Consumer
- Recent reports indicate that consumers appear to be feeling overwhelmed by inflation and concerns about tariffs. Last week, the University of Michigan Consumer Sentiment data showed the lowest reading since 2022.
- Gold has seen its rally continue, with spot gold prices briefly cracking $3,000 per troy ounce on Friday of last week. It has been a heck of a run in the shiny yellow metal for the past year.
The Week Ahead
- Remember when the markets were all about the Fed and inflation data? Things have changed quickly in tariff-infused fashion. But this week, we have the March Federal Reserve (Fed) meeting on deck. Expectations are for the Fed to leave rates unchanged, with markets pricing in a cut in June, with only a 31% chance in May as of last week.
- Let’s see if the Fed can settle some nerves, given the recent rise in volatility. With the S&P 500 trading close to correction territory, some long-term investors may find opportunities that did not exist just a month ago.
That’s it for this week’s update! As always, if you’d like to discuss any of these topics further or have any other questions or needs as the week unfolds, don’t hesitate to reach out.
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