Everything to Know about Macro and Markets
Stocks jumped on Friday but still closed the week with steep losses. The Dow Jones Industrial Average (DJIA) declined by 3.07%, marking its worst week since March 2023, while the S&P 500 (SPX) lost 2.27%. Meanwhile, the tech benchmarks Nasdaq Composite (NDAQ) and Nasdaq-100 (NDX) dropped 2.43% and 2.47%, respectively. All major indexes are now deep in the red year-to-date.
No Tariff News is Good News
Thursday’s market bloodbath saw the S&P 500 joining the Nasdaq Composite and the Nasdaq-100 in the correction territory, while the blue-chip DJIA stopped short of a correction, falling just over 9% from its all-time high. It took less than a month for the S&P 500 to drop 10% from its peak, making it the fifth-fastest correction in the past 75 years.
However, markets strongly rebounded on Friday, capping off their best day since November, as the reduced risk of a government shutdown prompted investors to “buy the dip” after Thursday’s brutal sell-off. Investors cheered the news that Senate Democrats backed off a threat to block a funding bill aimed at averting a shutdown. Meanwhile, the absence of fresh tariff headlines from the White House offered further relief, proving that in this case, “no news is good news.”
Large-cap tech stocks that led the declines over the past month spearheaded the rebound rally on Friday, with Nvidia (NVDA) surging over 5% and leading the Magnificent Seven higher. The S&P 500 and both Nasdaq indexes posted their best day since January 6th, the post-election rally. Several leading Wall Street strategists argued that last month’s sell-off was a correction, not the start of a bear market, encouraging investors to buy beaten-down stocks at cheaper valuations.
Tariff Tantrum
Last week was brutal for stocks, capping the S&P 500’s longest losing streak since August. The market suffered as President Trump’s abrupt tariff announcements rattled sentiment. Wednesday saw a brief reprieve after encouraging inflation data, with February’s CPI coming in below expectations. Additionally, the PPI report, which feeds into the Fed’s preferred inflation gauge, Core PCE, also came in weaker than expected, pointing to further disinflation at the wholesale level.
However, trade war fears quickly overshadowed these positives as concerns grew that tariffs could stall the disinflationary trend while harming economic growth. As if on cue, the University of Michigan’s Consumer Sentiment Index extended its three-month slide, dropping to its lowest level since November 2022. Consumers have been rattled by tariff-related uncertainty, with the latest developments only adding to the gloom.
President Donald Trump has threatened a 200% tariff on European alcoholic beverages following the EU’s retaliatory levies on U.S. imports, which include a 50% tariff on American whiskey. This followed Trump’s announcement of 25% tariffs on steel and aluminum, further escalating trade tensions with Europe. Meanwhile, the President slapped a 50% levy on Canadian steel and aluminum, in response to Canada’s retaliatory 25% tariff on U.S. electricity exports.
With tariffs being imposed across the board and recession fears resurfacing, economists are now forecasting lower growth and higher inflation than they did just three months ago. This puts the Federal Reserve in a tough spot, as core inflation remains well above its target, while tariff uncertainty clouds the economic outlook even further.
Stocks That Made the News
▣ Oracle (ORCL) reported mixed fiscal Q3 2025 results, with revenue and EPS falling short of analysts’ expectations due to currency headwinds and slower growth in its non-cloud legacy businesses. Meanwhile, cloud revenue surged, driven by extraordinary AI demand. Notably, Oracle’s cloud RPO (remaining performance obligations) soared, reinforcing long-term growth expectations. The company signed over $48 billion in sales contracts during the quarter, securing deals with several AI leaders. Oracle now holds a $130 billion backlog of signed deals, which it expects to fuel sustained long-term growth. However, cloud and AI investments are pressuring short-term profitability, with FQ4 EPS guidance coming in lower than anticipated, weighing on post-earnings stock performance.
In other company news, Oracle is once again the leading contender to manage TikTok’s U.S. operations, as the deadline for ByteDance to divest fast approaches. Since Oracle has been storing all of TikTok’s U.S. data since 2022, a takeover would be a natural fit.
▣ DocuSign (DOCU) surged after beating earnings and revenue estimates, driven by increased adoption of its artificial intelligence offerings. Although DOCU – like many companies this earnings season – issued a downbeat guidance, investors shrugged off the news, focusing instead on a strong billings outlook.
▣ Intel’s (INTC) surged over 18% for the week as investors cheered the appointment of Lip-Bu Tan as its new CEO. Tan’s extensive experience, including his successful tenure leading Cadence (CDNS), has sparked cautious optimism among analysts about his ability to engineer a turnaround for the struggling chipmaker.
▣ Ulta Beauty (ULTA) was the S&P 500’s top performer on Friday, surging after crushing earnings expectations. In particular, its Q4 EPS beat was so strong that it overshadowed the company’s muted guidance for the current fiscal year. Additionally, investors were encouraged by CEO Kecia Steelman’s reassurance that Ulta Beauty has minimal exposure to the looming trade war, with only about 1% of shipments coming from direct imports.
▣ Adobe (ADBE) sank more than 10% for the week, even after Friday’s rebound, as a wave of analysts slashed price targets following its earnings report. While the creative software giant beat revenue and EPS estimates for fiscal Q1 2025, its FQ2 and FY 2025 guidance disappointed. Additionally, investors were frustrated by the lack of a clear roadmap for monetizing Adobe’s heavy AI investments.
▣ Apple (AAPL) lagged its Magnificent Seven peers last week after an announcement about a delay in the new Siri rollout weighed on investor sentiment. The company admitted uncertainty over the official launch timeline for the AI-enhanced Siri upgrade.
Upcoming Earnings and Dividend Announcements
The Q4 2024 earnings season is nearly over, but some notable earnings releases are still scheduled for this week.
The highlight of the week will be Micron’s (MU) quarterly results, scheduled for March 20th. In addition, reports in focus are arriving from Textron (TXT), General Mills (GIS), Nike (NKE), FedEx (FDX), Lennar (LEN), Darden Restaurants (DRI), Jabil (JBL), Accenture (ACN), and Carnival (CCL).
Ex-dividend dates are coming this week for Merck & Company (MRK), DTE Energy (DTE), Iron Mountain (IRM), Seagate Tech (STX), VICI Properties (VICI), Sempra Energy (SRE), Philip Morris (PM), Broadcom (AVGO), Walmart (WMT), and other dividend-paying firms.
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