Market Recap – Tuesday, March 25, 2025
Equities Grind Higher Amid Tariff Jitters
US equities ended mostly higher in a quiet session, extending Monday’s rally with the S&P 500 (+0.16%) and Nasdaq (+0.46%) posting a third-straight gain. The Dow finished flat (+0.01%) while the Russell 2000 (-0.66%) lagged. Mega-cap tech led again — TSLA outperformed while NVDA was a notable laggard. Other gainers included GSEs, industrial metals, tech hardware, banks, and hotels. Laggards were spread across pharma, China tech, retail, and logistics, with UPS and KBH both falling on softer outlooks. Treasuries strengthened with curve steepening, and the 2Y auction was well received. The dollar index slipped 0.1%, gold rose 0.3%, crude oil was down 0.2%, and bitcoin futures dipped 0.5%.
Tariff Headlines Continue to Drive Narrative
Markets remained focused on the April 2 tariff deadline, with the latest FT report suggesting the White House may pursue a phased, two-step approach, possibly using emergency economic powers to impose immediate levies while launching broader Section 301 investigations. The lack of clarity reinforced skepticism that April 2 will be a true clearing event. Trump also reiterated more sector-specific tariffs (e.g., on autos and chips) may be coming soon, though noted some countries could be spared. Tariff volatility continues to be a key overhang on sentiment and risk to earnings estimates.
Economic Data: Consumer Weakness Emerges
March consumer confidence dropped to 92.9, well below consensus and now at the lowest since January 2021, with the expectations index at a 12-year low. Respondents flagged inflation and trade policy worries as growing concerns. February new home sales were in line, while the Richmond Fed Manufacturing Index slipped into contraction territory at -4, driven by weak shipments and employment. Fed Governor Kugler said inflation in goods is problematic, while Bostic (Monday) suggested just one cut this year, fueling concern about a more hawkish Fed tilt.
Corporate Headlines: M&A, Guidance Cuts, and Activism
Trump Media (DJT) surged after announcing plans for a crypto-linked ETF platform.
Mobileye (MBLY) rallied on a Volkswagen partnership for advanced driver assistance.
Carvana (CVNA) and Cloudflare (NET) gained on upgrades, while Lyft (LYFT) rose on activist stake by Engine Capital.
On the downside, UniFirst (UNF) dropped double digits after Cintas terminated merger talks.
KB Home (KBH) fell on weak orders and FY25 guide-down, citing affordability concerns.
UPS slumped after BofA flagged softer volumes due to weather and tariff uncertainty.
Here’s Our Take
Markets showed resilience Tuesday, eking out gains despite weak economic data and continued uncertainty around the Trump 2.0 tariff regime. While positioning remains supportive and mega-cap tech is regaining leadership, investor confidence is fragile. Consumer sentiment has deteriorated sharply, inflation worries are creeping back, and there’s renewed concern that Q1 and FY25 earnings estimates may need to reset lower.
With tariff headlines dominating the tape and the April 2 date approaching, investors should stay cautious. The broader setup still favors disciplined, selective risk-taking, particularly in companies with earnings visibility, pricing power, and minimal China/trade exposure. Meanwhile, upcoming data — particularly durable goods, core PCE inflation, and consumer sentiment — could move the needle on both Fed expectations and market direction heading into quarter-end.