US Stocks Rebound, Yet Face Weekly Losses Amid Trade War Concerns
March 14, 2025 – A Volatile Week on Wall Street
US stocks experienced a robust rally on Friday, concluding a tumultuous week shaped by fears of a government shutdown and escalating trade tensions. The S&P 500 index surged more than 2.1%, recouping some losses after dipping into correction territory just a day prior. The Nasdaq Composite led the charge, rising over 2.6%, fueled by gains in technology stocks, while the Dow Jones Industrial Average climbed more than 600 points, reflecting a 1.6% increase.
Despite the positive end to the trading week, all three major stock indices—S&P 500, Nasdaq, and Dow—sustained weekly losses exceeding 2%. This downturn had implications for broader market sentiments, driven predominantly by uncertainty surrounding President Donald Trump’s tariff policies.
Wall Street Reacts to Government Funding Bill Updates
Investor anxiety began to ease as Senate Democratic leader Chuck Schumer stepped back from a potential blockade over a funding bill purposed to prevent a weekend government shutdown. This development lent a temporary sense of stability to the markets. However, the backdrop of ongoing trade disputes remained front and center for investors, particularly following Trump’s ongoing tariffs against key trading partners.
Adding another layer of complexity, gold prices reached an unprecedented high, crossing $3,000 an ounce. Analysts attributed this surge to fears surrounding the economic fallout from tariffs imposed by the Trump administration. On Thursday, Trump made headlines by stating he would not "bend at all," intensifying a tense trade feud with global partners.
Consumer Sentiment and Economic Indicators
While there were signs of market recovery, underlying economic indicators painted a less optimistic picture. Consumer sentiment continued to deteriorate, dropping to a disheartening 57.9 in March according to the University of Michigan’s latest survey. This figure fell well below the 63 anticipated by economists and marked the lowest level since November 2022. Inflation expectations were also on the rise, with consumers projecting inflation at 4.9% over the next year—up from 4.3% just a month prior. This marked a significant increase, particularly in contrast to the 3.3% expectation just two months earlier, indicating growing concerns about economic conditions amid turmoil in the marketplace.
Market Segment Highlights
Technology stocks led the recovery on Friday with a rise of nearly 3%. Notable gains included significant movements in stocks like Nvidia, which spiked over 5%. The "Magnificent Seven" of tech shares, which includes companies such as Tesla, Meta, Microsoft, and Amazon, all saw upward movement despite still being poised for losses for the week.
In the commodity markets, oil prices remained relatively steady as West Texas Intermediate futures rose to settle above $67 per barrel. This stability in oil prices was influenced by traders’ assessments of ongoing tariff uncertainties paired with efforts to conclude the Ukraine conflict.
Market Analysts Provide Insight
Market analysts maintained a cautiously optimistic narrative. BMO Chief Investment Strategist, Brian Belski, noted in a statement, “It is inappropriate to be changing forecasts for the sake of uncertainty and fear.” Belski emphasized that corrections should not be equated with bear markets and cautioned against reacting hastily to market fluctuations.
As the week concluded, Bitcoin, the leading cryptocurrency, saw itself hovering around $83,000, reflecting a recovery amid general market stabilization. Analysts believe that as clarity regarding trade policies emerges, the cryptocurrency market may regain strength, providing a possible safe haven for cautious investors.
In summary, while US stocks experienced a significant rebound to end the week, lingering concerns about government funding, trade escalations, and declining consumer sentiment underline the ongoing volatility in the market landscape. With policymakers set to meet for discussions next week, all eyes remain on potential economic shifts that might influence market trajectories in the coming months.
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