Market Recap – Thursday, March 13, 2025
S&P Enters Correction Territory Amid Renewed Tariff Fears, Stocks Drop as Selling Pressure Resumes
U.S. equities fell sharply on Thursday, with the S&P 500 (-1.39%) officially entering correction territory, now down more than 10% from its February 19 record high. The Nasdaq (-1.96%) led declines, while the Dow (-1.30%) and Russell 2000 (-1.62%) also saw steep losses. Big Tech retreated, erasing much of Wednesday’s bounce, while homebuilders, retail, software, asset managers, and industrials lagged. Defensive sectors like utilities, managed care, pharmaceuticals, and telecom outperformed, highlighting continued risk-off positioning.
Policy Uncertainty and Trade War Jitters Weigh on Markets
Investor sentiment remained fragile amid renewed tariff concerns, with President Trump threatening 200% tariffs on EU wines and alcohol if the bloc doesn’t remove tariffs on American whiskey. Ongoing reciprocal tariff concerns ahead of April 2 further fueled uncertainty. Despite Treasury Secretary Bessent dismissing market volatility as a short-term issue, investors remained cautious, particularly with corporate earnings revealing signs of softer consumer demand. Meanwhile, Senate Democrats signaled opposition to the House’s government funding resolution, adding another layer of Washington gridlock to the mix.
Economic Data Offers Some Relief
While markets sold off, economic data provided some encouraging signs. February PPI came in cooler than expected, with headline PPI flat (vs. +0.2% expected) and core PPI down 0.1% (vs. +0.3% forecast), reinforcing disinflation trends. Weekly jobless claims were slightly lower than expected, indicating continued labor market resilience. However, Treasury auctions reflected ongoing uncertainty, with a weak 30-year bond sale, in contrast to strong demand for 10-year Treasuries on Wednesday.
Corporate Earnings: Consumer & AI Themes in Focus
Earnings results continued to highlight consumer weakness and macro-driven disruptions.
Adobe (ADBE -13.9%) posted solid Q1 results but guided Q2 and FY slightly below expectations, with investors also reacting negatively to the removal of Creative and Document ARR disclosures despite strong AI growth commentary.
UiPath (PATH -15.7%) plunged after weak ARR guidance, with management citing delays in U.S. federal deals due to budget constraints and macro uncertainty.
Intel (INTC +14.6%) surged after naming Lip-Bu Tan as CEO, a move widely viewed as a positive leadership shift.
Dollar General (DG +6.8%) beat expectations and reassured investors it is well-positioned to navigate tariff risks, though flagged ongoing margin pressures.
Geopolitical Updates: Tariff Talks and Russia-Ukraine Developments
U.S.-Canada tariff tensions eased slightly, with Commerce Secretary Lutnick calling his meeting with Canadian officials “extremely productive”—though uncertainty remains over Trump’s stance on steel and aluminum duties.
Trump and European leaders remain at odds, with the White House doubling down on its aggressive tariff stance.
Russia signaled preliminary support for a Ukraine ceasefire, though Putin emphasized that negotiations must address the “root causes” of the conflict before a final agreement is reached.
Here’s Our Take: Navigating the Current Market Downturn
S&P 500 now officially in correction territory — selling pressure remains intense, with four straight weekly declines and six in the past seven weeks.
Trade war risks are escalating, with Trump signaling more aggressive tariff action— investors should be cautious on sectors highly exposed to global trade, including industrials, autos, and consumer discretionary.
Disinflationary trends persist, with PPI and CPI both coming in cooler than expected, keeping the Fed’s rate cut path intact for later this year.
Tech leadership remains volatile, with AI-exposed names facing higher scrutiny on guidance — while AI demand remains strong, valuation resets continue to play out.
Defensive positioning is increasing, with outperformance in utilities, managed care, and consumer staples, suggesting investors are shifting toward safety amid macro uncertainty.
Bottom Line: The market is navigating a tough mix of trade risks, weaker earnings revisions, and investor positioning unwinds. While disinflation trends are a bright spot, volatility is likely to remain elevated as policy uncertainty continues to weigh on sentiment. Staying selective, managing risk, and positioning defensively remains key in the near term.