March 17, 2025
S&P futures down 0.4% following Friday’s sharp rally, which marked the S&P’s best daily performance since Trump’s 2024 election win. Despite the bounce, the index still logged its fourth consecutive weekly decline. Asian markets mostly higher, with South Korea, Japan, and Australia leading gains, while European markets are mixed. Treasuries firmer, with yields down 1-3 bps and curve flattening. Dollar flat, gold slightly lower, Bitcoin -1.2%, and WTI crude +1.1%.
Key Market Drivers
- Market back on the defensive despite a lack of new tariff headlines over the weekend and sell-side talk of cleaner positioning.
- Concerns over Trump 2.0 policy uncertainty continue, with focus on the upcoming April 2 reciprocal tariff announcements.
- Reports highlight further spillover of trade and policy uncertainty into consumer and corporate sentiment.
- Geopolitical focus on Tuesday’s Trump-Putin call on Ukraine.
- China data showed mostly better-than-expected January-February activity, though details on Beijing’s latest consumption-boosting plan remain vague.
Key Data & Events This Week
- Monday: Retail sales (Feb.) expected at +0.6% m/m (core +0.3%), Empire manufacturing, homebuilder sentiment.
- Tuesday: Housing starts, building permits, import prices, industrial production.
- Wednesday: FOMC decision, Powell press conference, updated SEP (growth likely revised lower, inflation higher, median dot for 2025 unchanged at two rate cuts).
- Thursday: Jobless claims, Philly Fed manufacturing.
- Friday: Fed’s Williams speaks.
Corporate Highlights
- NVDA GPU Tech Conference (GTC) kicks off today, with CEO Jensen Huang’s keynote on March 18. Investors looking for updates on pipeline (Blackwell Ultra, Rubin), GM recovery, China dynamics, and AI spending trends.
- ADBE Digital Experience Conference runs March 17-20.
- Key earnings this week:
- Wednesday AM: GIS, WSM
- Thursday AM: ACN, DRI
- Thursday PM: FDX, LEN, MU, NK
U.S. equities rallied sharply on Friday (Dow +1.65%, S&P 500 +2.13%, Nasdaq +2.61%, Russell 2000 +2.53%), with the S&P 500 posting its best session since November. However, despite the rebound, all major indexes still logged their fourth straight week of outsized losses. Oversold conditions, reduced U.S. government shutdown risks, progress in U.S.-Canada trade talks, and optimism over China stimulus contributed to the bounce.
Treasuries weakened as yields rose, with some curve flattening. The dollar fell (-0.1%), while gold surpassed $3,000/oz for the first time amid inflation concerns. Bitcoin futures surged 5.6%, and WTI crude climbed 0.9%.
Macroeconomic Developments
- Consumer sentiment deteriorated further, with the March preliminary University of Michigan Consumer Sentiment Index falling to 57.9, its lowest level since November 2022.
- 1-year inflation expectations jumped to 4.9% from 4.3%, while 5-year expectations rose to 3.9% from 3.5%, underscoring growing price pressures.
- The report cited high levels of policy uncertainty impacting consumer confidence.
- U.S.-Canada trade relations improved, with Ontario Premier Doug Ford calling Thursday’s trade talks “productive” and Canada’s new Prime Minister Mark Carney stating he believes a deal will be reached.
- China stimulus hopes grew, with policymakers pledging to boost domestic consumption and speculation of an RRR cut next week.
- The Senate prepared to vote on the House’s continuing resolution (CR), reducing government shutdown risks after Schumer said he would support the bill.
Bearish Themes (Week-Ended March 14, 2025)
- Trump’s “put” continued to move further out of the money, as he downplayed market weakness and declined to rule out a recession.
- No letup in trade tensions, with U.S. tariffs on steel and aluminum triggering retaliatory measures from Canada and the EU.
- Delta and other airlines cut Q1 guidance, citing dampened consumer and corporate confidence from policy uncertainty.
- Retailers flagged cracks in consumer resilience, with Kohl’s citing pressure on lower-income consumers and Dollar General noting increased trade-down trends.
- CPI and PPI reports failed to shift Fed rate expectations, keeping monetary policy concerns in focus.
- Equities saw their largest weekly outflows this year, with flows shifting toward Europe and China.
Bullish Themes (Week-Ended March 14, 2025)
- Core CPI and PPI came in cooler than expected, supporting the narrative of easing inflationary pressures.
- U.S.-Canada trade relations improved, with officials expressing optimism about a resolution.
- Visa and Mastercard noted steady Q1 spending trends, easing consumer slowdown fears.
- JPMorgan estimated potential equity buying from month-end rebalancing at ~$135B, suggesting near-term support for stocks.
- AAII sentiment showed extreme bearishness, a contrarian buy signal.
- China’s stimulus efforts fueled optimism, with Chinese stocks rallying on expectations for an RRR cut.
Key Events Next Week
- Monday: Retail sales, Empire manufacturing, homebuilder sentiment – focus on consumer resilience concerns.
- Tuesday: Housing starts, building permits, industrial production, import prices.
- Wednesday: FOMC decision, Powell press conference, updated Summary of Economic Projections (SEP).
- Thursday: Jobless claims, Philly Fed manufacturing.
- Friday: Fed’s Williams speaks.
Company-Specific News by Sector
Information Technology (+3.03%)
Tech led Friday’s rally, driven by semiconductors and software, amid strong earnings reports and oversold conditions.
- Rubrik (RBRK +27.8%) – Q4 beat, strong subscription ARR growth, positive commentary on Security Cloud adoption.
- Semtech (SMTC +21.1%) – Q4 revenue, earnings, and margins beat; infrastructure and datacenter sales strong.
- PagerDuty (PD +17.8%) – Q4 revenue ahead, pipeline growth positive, $150M buyback announced.
- Astera Labs (ALAB +10.5%) – Upgraded at Raymond James, expected to benefit from AI and high-speed connectivity demand.
- Check Point Software (CHKP +4.6%) – Upgraded at Wells Fargo, citing expected FCF growth acceleration.
Consumer Discretionary (+2.14%)
Retail and travel stocks rebounded, but consumer sentiment remains a concern.
- Peloton (PTON +16.1%) – Upgraded at Canaccord Genuity, citing valuation and new revenue initiatives.
- Ulta Beauty (ULTA +13.7%) – Q4 EPS, comps, and revenue beat; FY guidance better than feared.
- ServiceTitan (TTAN +13.0%) – Q4 revenue acceleration, strong new bookings.
- Chipotle (CMG +2.7%) – Upgraded at Loop Capital after 10% pullback.
- Xponential Fitness (XPOF -38.5%) – Q4 earnings miss, FY guidance weak, restatement of financials announced.
Financials (+2.30%)
Banks and asset managers moved higher as Fed rate expectations remain uncertain.
- Crown Castle (CCI +10.4%) – $8.5B fiber business sale, dividend cut, revenue outlook better than feared.
Industrials (+1.84%)
Industrial metals and machinery stocks rallied, but regulatory concerns weighed on transport stocks.
- PACCAR (PCAR -3.8%) – EPA considering reversing Biden’s clean truck emissions plan, creating regulatory uncertainty.
Consumer Staples (+0.28%)
Discount retailers outperformed as tariff worries persist.
- Dollar General (DG +6.8%) – Q4 revenue beat, comps solid; management confident in mitigating tariff impacts.
Healthcare (+0.76%)
Healthcare was mixed, with regulatory risks affecting select names.
- Abbott Labs (ABT -2.5%) – Judge overturned prior jury ruling in infant formula lawsuit.
- Oscar Health (OSCR -9.2%) – Downgraded at Wells Fargo on regulatory risks.
Energy (+2.81%)
Oil prices climbed, helping energy stocks recover after recent losses.
- WTI crude rose 0.9%, extending its weekly gain.
Communication Services (+2.03%)
Telecom stocks lagged, but China tech stocks surged on policy support headlines.
- T-Mobile (TMUS -1.2%) – Downgraded at Citi, citing rising competition in wireless market
Eco Data Releases | Monday March 17th, 2025
S&P 500 Constituent Earnings Announcements | Monday March 17th, 2025
No constituents report today
Data sourced from FactSet Research Systems Inc.
