Market Recap: S&P 500, Dow, and Nasdaq Edge Lower Amid Policy Uncertainty

In a day marked by cautious trading, major U.S. stock indexes retreated slightly on Thursday, March 20, 2025, as investors grappled with ongoing policy uncertainties and digested recent economic data. The market’s performance reflected a pause in the momentum gained from the Federal Reserve’s recent decision to maintain interest rates and signal potential cuts later in the year.

Market Performance

The S&P 500 closed at 5,662.89, down 12.40 points or 0.22% for the day. This minor setback came after the benchmark index had shown resilience earlier in the week. The Dow Jones Industrial Average (DJIA) demonstrated similar caution, slipping 11.31 points or 0.03% to finish at 41,953.32. Meanwhile, the tech-heavy Nasdaq Composite experienced a more pronounced decline, falling 59.16 points or 0.33% to close at 17,691.63.

Sector Performance and Notable Movers

Despite the overall market decline, several sectors showed strength. The Consumer Discretionary Select Sector SPDR (XLY), Energy Select Sector SPDR (XLE), and Industrials Select Sector SPDR (XLI) were standout performers, rising 1.9%, 1.6%, and 1.3%, respectively.

Among individual stocks, The Boeing Company (BA) emerged as a major gainer within the Dow, with its shares climbing 6.8%. This surge in Boeing’s stock price contributed significantly to offsetting losses elsewhere in the index.

On the downside, Accenture (ACN) faced notable pressure, with its shares declining 7.26%. The consulting giant’s stock was impacted by concerns over potential revenue hits from U.S. government contracts, as the administration under Elon Musk’s influence pursues federal spending cuts.

Economic Context and Policy Uncertainty

The day’s trading was influenced by ongoing discussions about significant policy changes under the current administration. Investors remained cautious as they assessed the potential impact of these changes on various sectors and the broader economy.

However, recent economic indicators have provided some reassurance about the U.S. economy’s resilience. Data from the National Association of Realtors showed an unexpected 4.2% increase in sales of previously owned homes in February, surpassing analysts’ expectations of a 3% decline. Additionally, jobless claims saw only a slight uptick, while layoffs remained at low levels, further supporting the narrative of a robust labor market.

Federal Reserve’s Stance and Market Outlook

The market’s performance on Thursday came in the wake of the Federal Reserve’s recent decision to maintain interest rates at their current levels. The central bank reaffirmed its projection for two potential rate cuts later in the year, a stance that had initially buoyed market sentiment.

Sam Stovall, CFRA Research’s chief investment strategist, commented on the market’s position: “Bull markets don’t die of old age. They die of fright, and what they’re most afraid of is recession. We’re at crossroads, but I think that the market is basically saying, Okay, we’re still on path for a rate cut in June, and we’re not going to worry about it because right now the economy is holding up pretty well.”

Looking Ahead

As the market navigates through policy uncertainties and assesses economic indicators, investors will be closely watching for any signs of shift in the Federal Reserve’s stance on interest rates. The potential for rate cuts later in the year continues to be a key factor in market sentiment and future performance expectations.

With the S&P 500 down 3.7% year-to-date and the Nasdaq showing an 8.4% decline, market participants remain cautiously optimistic about the potential for recovery in the coming months. However, ongoing geopolitical tensions, policy changes, and economic data releases will continue to play crucial roles in shaping market dynamics for the remainder of 2025.