Market Recap – Thursday, March 20, 2025
Choppy Trading Ends Lower as Tech Lags
U.S. equities finished lower after a morning rally faded by midday, with the S&P 500 (-0.22%), Dow (-0.03%), Nasdaq (-0.33%), and Russell 2000 (-0.65%) all ending in negative territory. Big tech underperformed, with weakness in semiconductors, networking, department stores, autos, off-priced retail, chemicals, and China tech. Relative outperformers included managed care, media, credit cards, energy, banks, exchanges, and restaurants (Darden +5.8%).
Treasuries were firmer, reflecting a slight steepening in the curve, though they came off their strongest levels from the morning. The dollar gained 0.4%, gold edged up 0.1%, Bitcoin fell 1.5%, and WTI crude jumped 1.7% after the U.S. imposed new sanctions on Iran-linked buyers.
Uneventful Session as Market Looks for Direction
There was no clear narrative driving today’s market action, with investors still weighing the recent correction, the Fed’s dovish QT slowdown, and the upcoming April 2 reciprocal tariff decision. Economic data remained mixed, with weekly jobless claims stable at 223K, continuing claims ticking up to 1.892M, and a stronger-than-expected February existing home sales report (4.26M vs. 3.92M forecast). The Philly Fed Index (12.5) was above consensus but below February's reading, reflecting some loss of momentum in manufacturing.
Sentiment on the consumer side improved slightly, supported by better-than-expected earnings from some retailers and positive commentary from BofA’s CEO and OpenTable data. However, concerns about Trump 2.0 policy sequencing and trade uncertainty remain an overhang, with Accenture (-7.3%) warning of slowing procurement trends and macro uncertainties.
Corporate Highlights: M&A Activity and Sector Moves
ProAssurance (+48.1%) surged after agreeing to be acquired by The Doctors Co. for $1.3B, a 60% premium.
Darden (+5.8%) reported mixed Q3 results but noted record Valentine’s Day sales and positive trends in Fine Dining.
Jabil (+3.1%) beat earnings expectations and raised FY guidance, citing strong demand in cloud infrastructure and digital commerce.
Nike (-4.7% after hours) warned of tariff-related profitability pressures and weaker China sales.
Micron (+6.2% after hours) guided above expectations, citing strong demand for AI-related HBM chips.
Accenture (-7.3%) flagged increasing client uncertainties, slower procurement trends, and a trimmed FY outlook.
Carvana (+5.3%) was upgraded to overweight, with analysts highlighting stability in the used-car market.
Rivian (-4.2%) was downgraded to neutral, with analysts citing a lack of upside catalysts and policy risk concerns.
Here’s Our Take
Tariff Uncertainty Still a Headwind – With April 2 reciprocal tariffs looming, corporate commentary and market sentiment remain cautious despite the lack of new tariff headlines in recent days.
Fed’s Dovish Tilt vs. Growth Concerns – The QT slowdown is seen as a positive, but growth downgrades and inflation risks have led to some skepticism about the Fed’s reaction function.
Consumer Spending Showing Some Resilience – Darden’s record sales, strong existing home sales, and upbeat restaurant data suggest consumer spending remains resilient despite macro uncertainty.
M&A and Sector Rotation in Focus – The insurance and home improvement sectors saw notable M&A activity, while retail and auto stocks saw mixed reactions to earnings and downgrades.
With markets still digesting Fed policy shifts and trade risks, investors should focus on company-specific fundamentals, positioning flows, and signs of stability in consumer and industrial sectors heading into next week.