Market Recap: Stocks Slip Amid Tariff Concerns and Economic Uncertainty
Major Indexes End Lower as Economic Worries Persist
On Friday, March 21, 2025, U.S. stocks closed lower, capping off a week of volatility driven by ongoing concerns about trade policies and economic growth. The major indexes struggled to maintain momentum, with the S&P 500 attempting to snap a four-week losing streak.
S&P 500: The benchmark index fell 0.2% to close at 5,662.89, with technology, materials, and industrials sectors leading the decline.
Dow Jones Industrial Average: The 30-stock index slipped 0.03%, or 11.31 points, to finish at 41,953.32.
Nasdaq Composite: The tech-heavy index dropped 0.3% to end at 17,691.63.
Despite the day’s losses, the S&P 500 was on track for a 0.4% advance for the week, potentially breaking its four-week losing streak. However, the index remains about 8% below its recent record high, narrowly avoiding correction territory.
Economic Uncertainty and Tariff Concerns Weigh on Markets
Investors continue to grapple with uncertainties surrounding U.S. trade policies and their potential impact on economic growth. The Federal Reserve’s recent decision to keep interest rates unchanged at 4.25-4.50% was accompanied by a downgrade in its U.S. economic growth forecast for 2025 to 1.7% from 2.1%.
Fed Chair Jerome Powell highlighted the “unusually elevated” uncertainty in the economic outlook, particularly citing the potential effects of tariff policies on future growth.
Transportation Sector Signals Economic Concerns
The Dow Jones Transportation Average, a closely watched indicator of economic health, has been under significant pressure. The index has slumped over 17% from its November all-time closing peak, reflecting growing concerns about economic activity.
Chuck Carlson, CEO of Horizon Investment Services, noted, “The transports are an important tell on future economic activity. The fact that they have significantly underperformed … gives me pause.”
Major Stock News and Corporate Developments
Several notable companies made headlines on Friday:
1. FedEx (FDX): Shares tumbled 7% after the company cut its earnings outlook, citing “weakness and uncertainty in the U.S. industrial economy.”
2. Nike (NKE): The sportswear giant saw its stock drop 5% following an announcement that sales this quarter would miss analysts’ expectations due to tariffs and falling consumer confidence.
3. Airlines: Major carriers continued to face pressure, with Delta Air Lines (DAL) and United Airlines Holdings (UAL) down over 20% year-to-date, while American Airlines (AAL) has plummeted 35%.
Upcoming Market Events to Watch
Investors should keep an eye on several key events in the coming week:
1. Consumer sentiment and consumer confidence reports
2. Monthly personal consumption expenditures (PCE) price index, a crucial inflation gauge, due on March 28
3. Details of the Trump administration’s reciprocal tariffs, expected to be announced on April 2
4. Ongoing geopolitical developments, including tensions in the Middle East and Ukraine
Market Outlook: Navigating Uncertainty
As markets continue to grapple with economic uncertainties and policy shifts, investors are reassessing their strategies. The recent outperformance of European and Asian markets relative to the U.S., particularly in the tech sector, has led to a significant rotation in both currencies and equities.
Manish Kabra, multi-asset strategist and head of U.S. equity strategy at Societe Generale, commented, “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 we move forward, market participants will be closely monitoring economic indicators, policy developments, and corporate earnings to gauge the trajectory of the U.S. and global economies in this period of heightened uncertainty.
