Stocks closed another turbulent week on a down note, with Friday marking the second-worst day of 2025 for U.S. equities. The Dow Jones Industrial Average (DJIA) ended the week with a loss of 0.96%, while the S&P 500 (SPX) fell by 1.53%, on course for its worst month since September 2023. Meanwhile, the tech benchmarks Nasdaq Composite (NDAQ) and Nasdaq-100 (NDX) dropped by 2.59% and 2.39%, respectively.
Stocks tried to keep up last week’s positivity, continuing their rise at the beginning of the week. However, markets reversed course on Wednesday, as President Donald Trump’s announcement of impending auto tariffs intensified investor concerns about escalating trade tensions and potential retaliatory measures.
Thursday saw more selling pressure, with stocks sliding across the board. The final Q4 2024 GDP growth reading – coming in at 2.4% annualized – confirmed that the economy began slowing down even before the tariffs were announced, and investors fretted that Trump’s policies would amplify the economic slowdown.
Friday brought more bad news on the macro front. February’s Core PCE came in hotter-than-expected at a 2.8% annual pace, reinforcing the persistence of price pressures. Meanwhile, consumer spending was weaker than economists predicted, despite better-than-expected personal income growth. The divergence between income and spending trends highlighted consumer caution about the outlook, while simultaneously weighing on growth prospects, with consumption still the key GDP driver.
The UoM Consumer Sentiment index’s final March reading further depressed investor sentiment, coming in at its lowest since November 2022 – marking a third straight monthly decline. At the same time, long-term household inflation expectations – a key Fed input – hit 4.1%, their highest level since June 2008.
As slowing spending is threatening to further drag on growth and inflation remains well above the Fed’s 2% target, the central bank finds itself in a precarious position vis-a-vis rate policy. With fears of stagflation rising, policymakers may already be behind the curve on supporting growth yet remain constrained by stubborn inflation.
Three Economic Events
Here are three economic events that could affect your portfolio this week. For a full listing of additional economic events, check out the TipRanks Economic Calendar.
» March’s ISM Manufacturing PMI – Tuesday, 04/01– This report shows business conditions in the U.S. manufacturing sector and serves as a significant indicator of overall economic conditions. PMIs are considered one of the most reliable leading indicators for assessing the state of the U.S. economy, helping analysts and economists anticipate changing economic trends.
» March’s ISM Services PMI – Thursday, 04/03 – This report reflects business conditions in the U.S. services sector, which contributes over 70% of the U.S. GDP. PMI indices are leading economic indicators used by economists and analysts to gain timely insights into changing economic conditions, as the direction and rate of change in the PMIs usually precede changes in the overall economy.
» March’s Nonfarm Payrolls and Unemployment Rate – Friday, 04/04 – The Nonfarm Payrolls and Unemployment reports represent the number of new jobs created during the previous month, along with the percentage of people actively seeking employment in the previous month. These reports are two of the most important economic indicators, as the shift in the number of positions is strongly associated with the overall health of the economy. One of the Federal Reserve’s mandates is full employment, and it considers labor market changes when determining its policy decisions.
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