Market Recap: S&P 500 Snaps Losing Streak Amid Economic Uncertainty
The U.S. stock market closed lower on Friday, March 21, 2025, but managed to snap a multi-week losing streak as investors grappled with economic uncertainties and geopolitical tensions. Despite the day’s losses, major indexes showed resilience in the face of ongoing concerns about trade policies and global growth.
Major Index Performance
The S&P 500 (SPX) ended the day down 0.2% at 5,662.89, but still managed to eke out a 0.4% gain for the week, breaking a four-week losing streak.
Market Movers and Shakers
Several major stocks made significant moves during the session:
1. FedEx (FDX): Shares plummeted over 10% after the company reported disappointing quarterly earnings and cut its full-year outlook for the third consecutive quarter.
2. Nike (NKE): The sportswear giant saw its stock fall 5% in premarket trading after warning that sales this quarter would miss analysts’ expectations due to tariffs and falling consumer confidence.
3. International Business Machines (IBM): The tech stalwart was the biggest loser in the Dow, with its stock price dropping 3.6%.
Economic Indicators and Fed Policy
The labor market showed signs of cooling, with initial jobless claims increasing slightly to 223,000 for the week ended March 20. Continuing claims rose to 1,892,000, suggesting that more people are staying on jobless rolls for longer periods.
The Federal Reserve maintained interest rates at 4.25-4.50% in its recent meeting, indicating potential rate cuts later in the year. Fed Chairman Jerome Powell noted “unusually elevated” uncertainty in the economic outlook, particularly due to trade policy uncertainties.
Sector Performance
Most sectors in the S&P 500 closed in negative territory:
– Technology Select Sector SPDR (XLK): -0.7%
– Materials Select Sector SPDR (XLB): -0.6%
– Industrials Select Sector SPDR (XLI): -0.5%
Transportation Sector Woes
The Dow Jones Transportation Average, a closely watched indicator of economic health, has slumped over 17% from its November all-time closing peak. This weakness is seen as a potential warning sign for future economic activity.
Chuck Carlson, CEO of Horizon Investment Services, commented, “The transports are an important tell on future economic activity. The fact that they have significantly underperformed … gives me pause.”
Global Market Trends
Global markets also faced headwinds, with European and Asian shares declining. The MSCI all country world share index fell 0.21%, while Europe’s STOXX 600 dropped 0.8%.
Upcoming Market Events
Investors will be closely watching several key events in the coming week:
1. Consumer sentiment and confidence reports
2. Personal Consumption Expenditures (PCE) price index release on March 28
3. Details of the Trump administration’s planned reciprocal tariffs on April 2
Commodities and Currencies
– Oil: Brent crude futures climbed 0.1% to $72.06 a barrel, while U.S. West Texas Intermediate crude futures dipped 0.15% to $67.97.
– Gold: The precious metal eased 0.5% to $3,030 an ounce after reaching a record high in the previous session.
– Currencies: The euro traded at $1.0835, while the Japanese yen weakened to 149.50 per dollar.
Market Outlook
As geopolitical tensions rise and economic uncertainties persist, investors remain cautious. The ongoing shift in market leadership from U.S. tech stocks to European and Asian equities, coupled with currency fluctuations, suggests a changing investment landscape.
Manish Kabra, multi-asset strategist at Societe Generale, noted, “When leadership changes in markets after three years of one directional trades, it doesn’t disappear in three months. The point is this is rotation in currencies and in equities both between regions and within the U.S.”
As markets navigate these choppy waters, investors will be keenly focused on upcoming economic data and policy decisions to gauge the direction of the global economy in the months ahead.
