AE Wealth Management: Weekly Market Insights | 3/23/25 – 3/29/25
Weekly Market Commentary
THE WEEK IN REVIEW: March 23-29, 2025
Another rough week for stocks
Last week started with a bit of hope — but the optimism didn’t last long. Investors initially thought President Donald Trump’s administration might go easy on the next round of tariffs, but on Wednesday, the president announced a hefty 25% tariff on all foreign-made cars.1 This spooked investors and derailed the market’s brief comeback attempt.
Making matters worse, the latest inflation numbers came in hot. The personal consumption expenditures (PCE) index — the Federal Reserve’s favorite inflation gauge — rose 0.4% in February, up from January’s 0.3%.2 The year-over-year rate is sitting at 2.8%, well above the Fed’s 2% target. Meanwhile, consumer spending barely budged, rising just 0.1% instead of the expected 0.3%.3
Consumer confidence isn’t looking that great, either, falling for the fourth month in a row.4 Consumer expectations plummeted to 65.2, the lowest level in 12 years. When this number stays below 80 — as it has for two straight months now — it often signals a recession might be around the corner. People just aren’t feeling very positive about their future income prospects at the moment. The consumer sentiment survey told a similar story, dropping 12% to 57.0. Consumers are increasingly worried about the “potential for pain” from ongoing economic policies.5
Business activity showed some mixed signals. S&P Global reported that its flash composite purchasing managers’ index showed growth, thanks to a strong services sector that offset manufacturing weakness.6 But businesses aren’t exactly bullish about the future. Their outlook fell to almost two-year lows, with many companies citing concerns about customer demand and the impact of the new administration’s policies. Input costs are rising at the fastest pace in almost two years, thanks largely to tariffs and higher labor costs.
It’s no surprise, then, that stocks ended the week on a sour note, with the Dow closing 700 points lower and the Nasdaq moving into correction territory on Friday.7 We also noted the dreaded “transitory” language creeping back into Fed communications related to interest rates as the Fed grapples with how to attack the inflation puzzle.8 Investors may need to start getting used to the idea of keeping rates higher for longer once again.
Coming this week
- Fed officials will be on the speaking circuit this week. We’ll keep our ears open to see if the “transitory” language pops up again and if they’re giving any hints about which direction rates will go.
- Data this week will include construction spending, manufacturing and auto sales on Tuesday.
- We’ll also see employment data for March throughout the week. The ADP employment report is scheduled for Wednesday, while the Bureau of Labor Statistics’ non-farm payrolls report will be released on Friday.
Index Performance Returns % | |||||
| 1 WK | YTD | 1YR | 3YRS | 5YRS | |
| S&P 500 | -1.53% | -5.11% | 6.22% | 6.85% | 17.04% |
| NASDAQ | -2.59% | -10.29% | 5.76% | 6.47% | 18.22% |
| DJIA | -0.96% | -2.26% | 4.46% | 5.96% | 13.96% |
Interest Rates: | |||||
| 3/28/2025 | 3/21/2025 | ||||
| UST 10 YR Government Bond Yield | 4.25% | 4.25% | |||
| Germany 10 YR | 2.73% | 2.76% | |||
| Japan 10 YR | 1.54% | 1.51% | |||
| 30 YR Mortgage | 6.73% | 6.68% | |||
| Oil | $69.04/ppb | $68.30/ppb | |||
| Regular Gas | $3.16/ppg | $3.13/ppg | |||
| All data as of March 28, 2025 | |||||
Sources:
1 The White House. March 26, 2025. “Adjusting Imports of Automobiles and Automobile Parts into the United States.” https://www.whitehouse.gov/presidential-actions/2025/03/adjusting-imports-of-automobiles-and-autombile-parts-into-the-united-states/. Accessed March 31, 2025.
2 Bureau of Economic Analysis. March 28, 2025. “Personal Income and Outlays, February 2025.” https://www.bea.gov/news/2025/personal-income-and-outlays-february-2025. Accessed March 31, 2025.
3 Alicia Wallace. CNN. March 28, 2025. “Consumers are saving more and spending less as Trump’s tariffs loom.” https://www.cnn.com/2025/03/28/economy/us-pce-spending-inflation-february/index.html. Accessed March 31, 2025.
4 The Conference Board. March 25, 2025. “US Consumer Confidence tumbled again in March.” https://www.conference-board.org/topics/consumer-confidence. Accessed March 31, 2025.
5 Jeff Cox. CNBC. March 28, 2025. “Consumer sentiment worsens as inflation fears grow, University of Michigan survey shows.” https://www.cnbc.com/2025/03/28/consumer-sentiment-worsens-as-inflation-fears-grow-university-of-michigan-survey-shows.html. Accessed March 31, 2025.
6 Chris Williamson. S&P Global. March 25, 2025. “Flash PMI data show developed world output growth edges higher in March, but confidence lowest since November 2022.” https://www.spglobal.com/marketintelligence/en/mi/research-analysis/flash-pmi-data-show-developed-world-output-growth-edges-higher-in-march-but-confidence-nears-lowest-since-2022.html. Accessed March 31, 2025.
7 Pia Singh and Sarah Min. CNBC. March 28, 2025. “Dow closes 700 points lower as inflation and tariff fears worsen.” https://www.cnbc.com/2025/03/27/stock-market-today-live-updates.html. Accessed March 31, 2025.
8 Jeff Cox. CNBC. March 20, 2025. “‘Transitory’ is back as the Fed doesn’t expect tariffs to have long-lasting inflation impacts.” https://www.cnbc.com/2025/03/19/transitory-is-back-as-the-fed-doesnt-expect-tariffs-to-have-long-lasting-inflation-impacts.html. Accessed March 31, 2025.
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