March 21, 2025
S&P futures are down 0.4% in early Friday trading, reversing modest gains seen earlier in the session. This comes after U.S. equities finished mostly lower on Thursday in a quiet session with little macro news. Despite the choppy tone, major indexes are still on track to finish the week higher, led by cyclicals while big tech remains a notable laggard.
Overseas, Asian markets were mixed overnight with Hong Kong and mainland China among the weakest, while Australia, South Korea, and India posted gains. European markets are trading broadly lower, down around 0.6%. Treasuries are a bit firmer with yields down 1–2 basis points. The dollar index is up 0.2%, gold is down 0.3%, bitcoin futures are off 0.7%, and WTI crude is slightly higher, up 0.1%.
Headline flow remains muted, though the upcoming 2-Apr reciprocal tariff announcement continues to hang over sentiment. There’s still hope it may open the door to negotiated trade resolutions, but the uncertainty surrounding Trump 2.0 policy direction is increasingly flagged as a risk heading into Q1 earnings season. On a more constructive note, positioning and flow dynamics remain supportive, with CTAs still net short and expectations for supportive quarter-end rebalancing. Concerns about a growth slowdown have also eased somewhat thanks to recent resilience in hard economic data.
Thursday’s after-hours earnings results were a key area of focus and leaned slightly disappointing overall:
- Micron (MU): Beat on earnings and guidance; positive takeaways around HBM demand and expanding total addressable market, though gross margins received some scrutiny.
- Nike (NKE): Q3 revenue and EPS topped estimates, but Q4 guidance came in light due to restructuring-related headwinds.
- FedEx (FDX): Fiscal Q3 was mixed; management highlighted a tough macro backdrop and lowered FY guidance more than expected, citing continued softness in U.S. industrial activity.
- Lennar (LEN): Topped EPS expectations, but gross margin missed and guidance disappointed; commentary emphasized ongoing macro headwinds.
- U.S. Steel (X): Preannounced Q1 EBITDA largely in line and slightly ahead of the Street; praised Trump’s tariff stance and emphasized benefits of Nippon Steel partnership.
- Tesla (TSLA): In the news after Elon Musk encouraged employees to hold their shares; also a report noted record levels of vehicle trade-ins.
- Colgate (CL): Announced a new $5B share repurchase authorization.
There is nothing scheduled on the U.S. economic calendar today, though Fed’s Williams is set to speak at 9:05 a.m. ET. Looking ahead, next week brings a busy data slate including flash PMIs (Monday), consumer confidence and new home sales (Tuesday), durable goods orders (Wednesday), final GDP and pending home sales (Thursday), and personal income/spending and core PCE inflation (Friday). Treasury auctions next week will total $183B across 2-, 5-, and 7-year notes
U.S. equities drifted modestly lower in Thursday trading (Dow -0.03%, S&P 500 -0.22%, Nasdaq -0.33%, Russell 2000 -0.65%), fading earlier gains as strength in the morning gave way to steady weakness through the afternoon. All major indexes finished in the red, with weakness concentrated in tech, semiconductors, industrials, and select consumer areas. The VIX remained below 20 for a second session, suggesting a still-contained volatility backdrop.
The session lacked a strong directional narrative. Traders continued to assess the Fed’s more dovish tone from Wednesday’s meeting—particularly the QT taper and Powell’s comments downplaying recent inflation concerns as largely tariff-related and potentially transitory. However, some viewed the market reaction as overly optimistic given the Fed’s meaningful growth downgrade and inflation forecast uptick.
There was also renewed focus on positioning and flows: technical indicators suggest cleaner positioning, with CTAs reportedly net short and rebalancing flows into quarter-end seen as a potential tailwind. Still, skepticism remains elevated with the 2-Apr reciprocal tariff announcement looming, adding a layer of policy uncertainty.
Economic data was largely supportive:
- Initial jobless claims were little changed at 223K, in line with expectations.
- Continuing claims rose to 1.892M but came in below consensus.
- Philly Fed Manufacturing Index came in at 12.5 (above the 10.0 estimate but down from 18.1 prior), showing ongoing regional strength.
- Existing home sales rose 4.2% M/M to 4.26M units, easily beating the 3.92M consensus, helped by increased inventory and pent-up demand.
Other macro headlines included:
- ECB’s Christine Lagarde and BOE’s Andrew Bailey warning of global growth and inflation risks tied to Trump’s proposed tariffs.
- U.S. imposed new sanctions on Iran-linked Chinese entities as part of a max pressure campaign.
- Mortgage rates ticked higher to 6.67%.
- Fed’s Williams scheduled to speak Friday morning.
- Upcoming data next week includes flash PMIs, consumer confidence, durable goods, PCE inflation, and final Q4 GDP.
S&P 500 Sector Performance and News
- Outperformers: Energy (+0.41%), Utilities (+0.41%), Financials (+0.19%), Healthcare (+0.11%), Real Estate (+0.10%), Consumer Discretionary (-0.19%)
- Underperformers: Materials (-0.62%), Consumer Staples (-0.52%), Technology (-0.49%), Industrials (-0.46%), Communication Services (-0.32%)
Information Technology
- Apple (AAPL): Restructuring AI leadership team to revamp Siri, per Yahoo.
- Accenture (ACN): Reported slightly better Q2 earnings and revenue, but flagged weaker client demand, DOGE-related headwinds, and softer operating margin guidance. Analysts concerned about slowing procurement trends.
- Jabil (JBL): Beat on Q2 earnings and revenue. Raised full-year guidance citing strength in capital equipment, cloud/datacenter, and digital commerce.
Consumer Discretionary
- Darden Restaurants (DRI): Q3 EPS met expectations; revenue and comps missed. FY25 EPS guidance lowered at the high end. Analysts remained positive on sales records during holidays.
- Carvana (CVNA): Upgraded to overweight at Morgan Stanley, citing resilience of the used car market and room for market share gains.
- Cava Group (CAVA): Upgraded to overweight at JPMorgan, citing valuation and white-space opportunity in U.S. market.
- Shoe Carnival (SCVL): Missed on revenue and comps; FY25 guidance light. Announced rebranding strategy with expected drag on margins and EPS.
Consumer Staples
- Boston Beer (SAM): Upgraded to buy at Citi on improved outlook for volume growth in 2025, driven by Truly and Twisted Tea trends.
Industrials
- ProAssurance (PRA): Agreed to be acquired by The Doctors Co. for $25/share, a 60% premium to prior close, valuing the deal at $1.3B.
- Beacon Roofing (BECN): Confirmed acquisition by QXO for $124.35/share in cash.
- Rivian (RIVN): Downgraded to neutral at Piper Sandler; analysts cited lack of catalysts and policy-related headwinds.
Communication Services
- Madison Square Garden Sports (MSGS): Gained on report that Celtics will be acquired for $6.1B+, sparking readthrough speculation.
- Tencent (TCEHY): AI strategy highlighted, but stock lagged as AI investment guide fell short of expectations.
Health Care
- Gilead (GILD): Fell on reports HHS may slash domestic HIV prevention funding.
- HealthEquity (HQY): Disappointed with weaker-than-expected FY26 EBITDA guidance and higher costs tied to cybersecurity; raised revenue guidance.
Energy
- Chevron (CVX): White House reportedly considering extending its Venezuela oil license.
- Crude: WTI gained 1.7% on new U.S. sanctions against Iran-linked buyers. Raymond James also flagged a major wave of new oil projects underway.
Financials
- FactSet (FDS): Revenue and ASV in line; narrowed FY organic ASV guide.
- UBS: May relocate headquarters amid regulatory pressure to hold more capital.
Eco Data Releases | Friday March 21st, 2025
S&P 500 Constituent Earnings Announcements | Friday March 21st, 2025
Data sourced from FactSet Research Systems Inc.
