Today was a good day for stock investors as the major indices—the Nasdaq 100 (QQQ), the S&P 500 (SPY), and the Dow Jones Industrial Average (DIA)—finished today’s trading higher. Interestingly, the tech sector (XLK) was the session’s leader, while the consumer staples sector (XLP) was the laggard. In addition, trading volume was lower than the average, which suggests that today’s optimism was cautious since investors were not rushing to buy shares.
In another development, U.S. existing home sales fell by 5.9% to an annual rate of 4.02 million homes in March, the biggest monthly drop since late 2022. The slowdown happened during the key spring selling season, mainly because high mortgage rates are making homes less affordable. The median home price reached $403,700, the highest ever for March, and inventory rose 8.1% to 1.33 million homes, which is about a four-month supply. In addition, fewer people are buying homes, and applications for mortgages have dropped for two weeks in a row to hit their lowest level since February.
This housing slowdown is happening at the same time that the economy faces more uncertainty. New jobless claims rose slightly to 222,000 last week, suggesting that while the job market is still strong, some cracks are starting to appear. Many companies are also reducing their hiring due to concerns about President Trump’s new tariffs, which have raised costs and created uncertainty. The Federal Reserve’s latest report shows that businesses are waiting to see what happens before making big decisions, and some are preparing for layoffs. Still, ongoing unemployment claims dropped, showing that some parts of the labor market remain stable.
Separately, business investment is also starting to weaken. A key measure of equipment spending, core capital goods orders, rose by just 0.1% in March, following a drop in February. Orders for items like computers, electronics, and appliances fell. Even though overall durable goods orders rose sharply, it was mainly due to a big jump in aircraft orders. Indeed, Boeing (BA) had a strong month for sales, but future orders may be at risk since China stopped accepting some aircraft deliveries. As a result, Economists expect slower economic growth, with Q1 GDP estimates now under 0.5%.