Economic Update: Markets React to Tariffs, Fed Policy, and Global Tensions

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Index Update

The Dow dropped 3.1% last week, its worst performance since 2023, amid Trump’s escalating tariffs and recession fears. Markets now look to U.S. retail sales data for consumer spending insights and the Federal Reserve’s policy decision on Wednesday, where rates are expected to remain steady. Additionally, Nvidia CEO Jensen Huang will discuss AI advancements at the GTC developer conference this week.

Market Movers

On Friday, the top gainers were Radius Recycling, Inc. (+107.54%), followed by Applied Optoelectronics, Inc. (+49.09%). On the contrary AirSculpt Technologies, Inc. (-15.31%) and Turtle Beach Corporation (-10.78%) declined the most the same day.

Commodities Update

Brent crude oil futures rose to around $71.2 per barrel, driven by China’s new measures to boost consumption, including income-raising initiatives and childcare subsidies. Strong economic data from China further supported gains. Geopolitical tensions also contributed, with the U.S. launching attacks on Yemen’s Houthis to protect Red Sea shipping and ongoing uncertainty over the Ukraine war. Additionally, upcoming talks between U.S. President Trump and Russian President Putin on a possible ceasefire added to market speculation.

Macro Update

The 10-year U.S. Treasury yield held at 4.3% as investors awaited the Federal Reserve's policy decision, with rates expected to remain unchanged. Markets anticipate two rate cuts later this year as the Fed balances slowing growth and inflation pressures from rising tariffs. U.S. consumer confidence hit a two-year low in March, with inflation expectations rising. Investors now focus on retail sales data for further economic insights.

Futures Update

U.S. stock futures fell on Monday as investors awaited new market catalysts. The S&P 500 and Nasdaq Composite declined 2.3% and 2.4% last week, marking their fourth straight weekly loss.

Bitcoin traded at $83,449 on March 17, rising 1.08% from the previous session. It gained 12.65% over the past four weeks and 23.88% over the last year.

After the sell-off observed during Thursday's trading session, stocks made a notable recovery on Friday. All major averages experienced significant gains, with the tech-heavy Nasdaq leading the way. By the close of trading, the major indices reached new session highs. The Nasdaq surged 451.07 points, or 2.6 percent, closing at 17,754.09, while the S&P 500 rose by 117.40 points, or 2.13 percent, to end at 5,638.93. The S&P 500 is currently testing important support levels and gradually moving higher, suggesting the potential for a relief rally; the 14-period RSI remains below the neutral midpoint, indicating a possible rebound. Key resistance is identified at 5,705, with support found around 5,442.