U.S. stock futures remained steady on Tuesday, March 18, 2025, after two days of gains, as investors awaited insights from the Federal Reserve's upcoming policy meeting. Futures for the Dow Jones Industrial Average and S&P 500 hovered just below the flat line, with the tech-heavy Nasdaq 100 down approximately 0.2%. Stocks were rebounding from last week’s selloff, where the S&P 500 had entered correction territory due to worries about the economy's resilience amid the pressures of President Donald Trump's trade war.
Wall Street's focus is now on the Fed's two-day policy meeting commencing on Tuesday, with expectations set for the central bank to maintain its current interest rates when it announces its decision on Wednesday, March 19, 2025. Fed Chair Jerome Powell emphasized the need for caution and close monitoring of economic data before implementing any changes to the rates.
On the same day, the Commerce Department is anticipating releasing housing starts data for February, which could provide additional clarity on the economy's health.
The stock market's fluctuations have prompted many analysts to look closely at underlying value and market fundamentals. On Monday, March 17, 2025, major U.S. indices exhibited signs of recovery, with the S&P 500 jumping 0.6% and the Dow increasing 0.9%. This was following the release of retail sales data indicating modest growth, though still below market expectations. Reports indicated retail sales rose only 0.2%, missing the anticipated 0.6% increase, with auto-excluded figures aligning with forecasts showing growth of 0.3%. The uptick has brought some optimism back to investors as they evaluate economic signals.
One noteworthy stock performance occurred with Enphase Energy, which surged 9.8% on March 17, marking the highest daily performance on the S&P 500 amid the rally. Meanwhile, shares of Intel climbed 6.8%, spurred by news related to its incoming CEO's plans to purchase $25 million worth of stock, signaling confidence from leadership.
Conversely, shares of pharmaceutical company, Incite, dropped by 8.6% after releasing disappointing results from its clinical trials for the skin treatment povorcitinib. The treatment did meet its primary endpoint for symptom reduction, but the improvement was not as significant as previous trials.
Investors are also closely monitoring developments with major banks, as Discover Financial shares fell 6.9% amid concerns about potential regulatory pushback on its merger with Capital One. Both companies anticipate scrutiny from the U.S. Department of Justice, which has raised alarm about the merger’s potential impact on competition.
While optimism permeated much of Monday’s trading, Tesla shares fell by 4.8%, following negative outlook comments from analysts pointing to downward pressure from weakening demand and challenges faced within the Chinese market.
At the same time, the so-called Magnificent 7 tech stocks participated less significantly, illustrating contrasting reactions within the larger equities market. Retail investors, on the other hand, responded with notable enthusiasm, contributing $3.2 billion to U.S. stocks and ETFs over just two days—a significant uptick not seen since the height of market volatility last August. This new wave of retail investment has pushed confirmed purchases to $8 billion over the past five days, prompting speculation among analysts about whether the current market may have hit bottom.
Not all fiscal environments remain alike; some banks are adjusting their year-end S&P 500 forecasts, with RBC Capital Markets dropping its outlook from 6,600 to 6,200, reflecting heightened economic growth concerns. Despite recent upticks, the S&P 500 is noted to be down over 3% year to date, indicating volatility yet to stabilize.
Looking forward, analysts remain cautious but seem hopeful for the S&P 500's potential for positive growth as investors weigh overall economic indicators and corporate performance. The market is acutely aware of policy adjustments and global economic shifts, leading to increased volatility and uncertainty.
Finally, cryptocurrency markets continued to experience outflows, with CoinShares reporting a total of $6.4 billion lost over the past five weeks—a streak unmatched historically. Bitcoin saw nearly $1 billion of outflows during this period, indicating shifting investor sentiment and the necessity for adapting strategies to remain competitive.
Financial strategists continue to advise closely monitoring economic trends and adjusting portfolios accordingly as we navigate through this uncertain investment climate. The week promises to reveal key data from the Fed meeting and provide additional economic insights, keeping traders and investors on alert.
