March Market Recap
The S&P 500 and NASDAQ stock indices recorded their worst quarters since 2022. The S&P 500 fell 5.75% in March, its sharpest drop since December 2022. Investors are worried about Donald Trump’s tariffs. He has promised that all countries will be targeted in the latest round to be announced tomorrow, April 2.
Nine of the 11 sectors in the S&P 500 finished lower last month. Utilities (+0.06) and Energy (+3.75%) squeezed out gains. Consumer Discretionary (-9.02%) and Information Technology (-8.87%) fell the most.
Benchmark Returns: March 2025 | YTD 2025
|
Dow Jones
|
S&P 500
|
NASDAQ
|
-4.20% | -1.28%
|
-5.75% | -4.59%
|
-8.21% | -10.42%
|
|---|
March was the second consecutive month that US equity markets declined as investors struggle to get their arms around the rapid-fire news flow from Washington, massive government layoffs, and ever-changing tariff headlines.
The S&P 500 officially hit a 10% correction on March 11. From its intraday peak on February 19 the S&P 500 fell 10.1%. This was the S&P’s first correction since 2022. The market was overdue for this level of pullback. On average, the market has historically declined 10% or more once every 14 months.
Not surprisingly, the US consumer sentiment weakened in March to the lowest level since November 2022. The drop from a late February reading of 64.7 to 57.9 was a much bigger decline than economists had forecasted.
The Federal Reserve Open Market Committee met in March and continued to take a wait-and-see approach, keeping interest rates unchanged. Policy makers maintained their outlook for two rate cuts this year. Although, they did negatively adjust other expectations by reducing their economic growth rate forecast and pushing inflation projections higher. Those adjustments proved insightful as inflation moved further above the Fed’s 2% target based on last Friday’s reading of the Personal Consumption Expenditures Index (PCE). The Fed’s favorite inflation indicator was +2.8% in February, above economists’ forecasts and above the previous month’s figure.
It’s important not to be reactive to the recent negative headlines. Investors’ sentiment is near bearish extremes, which is often a positive contrary indicator. It is possible that the Trump administration’s tariff announcements tomorrow could provide some clarity and Friday’s Jobs report on Friday will be telling of the overall health of the economy.
Hang on and stay tuned as we navigate the next few months. Ultimately, corporate earnings and economic data will drive market returns.
International equity markets continued to outperform US equities YTD and managed to close essentially flat for the month. The US Dollar fell 2.4% during the first week of March, the dollar’s biggest weekly decline since November 2022. In contrast, the euro posted its biggest weekly gain vs. the dollar since 2009 after European governments announced plans for increased stimulus spending. A weaker dollar YTD has been a tailwind for international equities.
Interest rates remained steady for the month with the 10-year treasury closing at 4.25%. Oil prices inched up 2.5% last month and are now flat for the year.
Ben Marks
Chief Investment Officer
Brett Angel
Senior Wealth Advisor
Investment Advice offered through Marks Group Wealth Management, a Registered Investment Advisor.
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