Weekly Market Commentary

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Week of Mar. 17 through Mar. 21, 2025

The S&P 500 index rose 0.5% for its first weekly gain since mid-February as markets responded to the Federal Reserve's decision to keep interest rates unchanged.

The S&P 500 ended Friday's session at 5,667.56. The index is still in the red for the month, down 4.8% for March so far, and has dropped 3.6% from where it ended 2024.

Investors have been concerned about uncertainty in monetary policy and the impact of tariffs on inflation in the near term, contributing to the declines in recent weeks.

On Wednesday, they received some clarity as the Federal Reserve's Federal Open Market Committee held the current range of the federal funds rate at 4.25% to 4.50% and said it still sees two rate cuts in each of the next two years and one in 2027. Still, the FOMC increased its inflation forecasts for 2025 and lowered its growth forecast due to uncertainty.

Following the decision, President Donald Trump renewed calls on the Federal Reserve to reduce rates and said the Fed would be much better off cutting rates as US tariffs start to ease.

New York Federal Reserve President John Williams said while monetary policy faces uncertainty, the current restrictive approach is suitable given a robust job market and inflation exceeding the 2% target, allowing for future adjustments.

US existing home sales rebounded unexpectedly in February as more inventory helped bring buyers to the market, according to National Association of Realtors data. NAR Chief Economist Lawrence Yun said that home buyers are slowly entering the market while mortgage rates remain stable. More inventory and choice availability are releasing pent-up housing demand, Yun said.

The energy and financial sectors of the S&P 500 were the top gainers this week and were up 3.2% and 1.9%, respectively. Consumer staples had the largest percentage drop, sliding 0.26%, followed by a 0.25% decline in materials, a 0.21% loss in utilities and a 0.1% decrease in communication services.

Hess (HES) was one of the top performers in the energy sector, gaining over 5.7%. Chevron (CVX) acquired 15.4 million shares of Hess between January and March, representing about 4.99% of all outstanding shares as of Jan. 31.

In financials, Apollo Global Management (APO) was up 6.8%. The private equity firm agreed to acquire a majority stake in OEG Energy Group from Oaktree Capital Management and other investors. Additionally, it agreed to purchase a 25% non-controlling stake in BP's (BP) 12% interest in the pipeline carrying natural gas from Azerbaijan through Turkey.

Nucor (NUE) was hit hardest in the materials sector, falling more than 7.6%. The company said it expects Q1 adjusted earnings in the range of $0.50 and $0.60 per diluted share. Analysts polled by FactSet expected $1.06 at the time.

Next week, earnings reports are expected from companies including Cintas (CTAS), Paychex (PAYX) and Lululemon Athletica (LULU).

Economic data will include February new home sales, pending home sales, durable goods orders and the advanced US trade balance.

Provided by MT Newswires.