Weekly Market Insights | Rough Week for Stocks, with Slight Friday Rally

Investors endured another volatile week. The Standard & Poor’s 500 Index declined 2.27 percent, while the Nasdaq Composite Index dropped 2.43 percent. The Dow Jones Industrial Average fell 3.07 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, lost 0.95 percent.^1,2

Markets Stem Losses

Stocks opened the week lower as investors reacted to the president’s weekend comments about the economy. Then, U.S. and Canadian leaders traded additional tariff threats, riling up anxious investors.^3,4 Stocks rebounded midweek after a cooler-than-expected Consumer Price Index (CPI) report eased growing inflation concerns.⁵

The broad market slide resumed Thursday, but better-than-expected February wholesale inflation data helped buffer losses. The S&P 500 ended Thursday in correction territory at ten percent below its February 19th record close.⁶

Markets pushed higher Friday, clawing back some losses for the week. News of progress on tariff talks with Canada and gains on resolving the federal government shutdown soothed investors’ nerves.⁷

Sunny Side ‘Down’

Fewer CPI constituents garner more attention from consumers right now than the price of eggs. Avian bird flu—and the subsequent culling of millions of chickens by the Biden Administration was primarily to blame for prices rising 15 percent in January and another 10 percent in February. While recent evidence suggests prices have dropped, the cost of eggs remains a sticky issue—even though prices of many other items have risen just as much, if not more.^8,9

So why do consumers appear to be overly uneasy?

One theory is that eggs symbolize something more significant. Not only are eggs a critical, inexpensive source of protein and nutrients for millions of consumers, but they are also a core part of many other foods made at home or mass-produced. For that reason, eggs are a mental proxy for how consumers believe the broader economy is doing.¹⁰

“The Sun Will Come Out Tomorrow”

The uncertainty in the equity markets is unnerving, but prospects for the future are promising for longer-term investors with a now pro-business agenda in Washington and repatriation of the US economy with trillions of dollars being invested in America by foreign investors and US corporations and the party is just getting started.

Of note: 

1.    There are policy positives looming in the future. Tax cuts will likely be extended and potentially increased, putting a tailwind at consumers’ backs.

2.    Deregulation is ongoing and as Jefferies strategist David Zervos has said (and he’s one of the best out there), deregulation is one of the most powerful pro-business moves an administration can make.

3.    The Fed Put is alive and well, and while it may not be able to totally offset aggressive tariff negotiations (for now), it is still supportive of stocks and risk assets.

4.    Senior levels of the Trump administration are staffed with successful people who have spent their lives navigating the global economies and markets. It is highly unlikely they all decided to go on a kamikaze mission to wreck the U.S. economy.

Point being, we may not be at a level that triggers the Trump Put yet, but we do not have a bunch of know nothings making decisions, either (regardless of one’s opinions of them, it is hard to argue that Howard Lutnick and Scott Bessent do not understand markets or the global economy).

5.    The AI tailwind for businesses around the world is gaining momentum.  

6.    The eventual resolutions of the Ukraine war and conflict in Palestine would be welcome news by the markets and world. 

7.    Oil prices have been trending lower which acts as an economic stimulus by reducing costs for consumers and businesses, leading to increased disposable income and investment.

Yes, in the near term, equity market needs some consistent policy to stop the markets decline, and until investors believe there will be a resolution to the tariff uncertainty (and this pertains mostly to Mexico and Canada as the market does understand the point of Chinese tariffs), then stock market rallies are likely to be only  temporary. Stay tuned. . . . . 

While negatively has surged with the ghouls in the mainstream media fanning the flames of uncertainty, I would be hesitant to extrapolate this out to medium or longer-term negativity because lost in all this tariff/trade noise is the fact that there are economically positive policies looming in the future as noted earlier and that is something that should give some comfort amidst the volatility.

You may recall a few weeks ago, I made observations that savvy investors were taking advantage of the drop in the price of gold which is now making historical highs eclipsing $3000 an ounce which has worked out well for our valued clients. The recent market turmoil might have given gold the bragging rights of being the "store of value," while Bitcoin (digital gold) struggles, at least for now.

Gold futures for April delivery have surpassed $3,000 an ounce for the first time ever, marking a historic milestone for the precious metal. Spot gold is consolidating just below $3,000 an ounce, up 15% year-to-date, while its digital counterpart, Bitcoin (BTC), is struggling down about 12.5% YTD and hovering around $82,500. 

The recent rally in gold to new all-time highs likely reflects both increasing inflation expectations and a broader flight to safety. In fact, both short and medium-term inflation expectations in the University of Michigan consumer survey have risen to multi-decade highs.

Many lower and middle-income U.S. consumers limped into 2025 and are growing increasingly concerned about inflation, but the decline in the price of oil will help at the pump. However, expect continued volatility in the equity markets. 

Partner with a Certified Financial Fiduciary® - In these volatile and uncertain times, the biggest value of working with a seasoned advisor, acting as a fiduciary, is having someone to help control emotions and not get caught up in making bad investment decisions. Let's face it, when times are turbulent, emotions will often trump logic, leading to devastating financial decisions. 

Email or call us at 732-888-4994 to schedule a complimentary 30 minute consultation and second opinion if you are not already a valued client of Castle Financial.

This Week: Key Economic Data

Monday: Retail Sales. Business Inventories. Homebuilder Confidence Index.

Tuesday:  Housing Starts and Permits. Import & Export Prices. Industrial Production. Capacity Utilization. Federal Open Market Committee (FOMC) meeting—Day 1.

Wednesday:  FOMC meeting—Day 2. Fed Announcement/ Fed Chair Press Conference.

Thursday:  Existing Home Sales. Weekly Jobless Claims. Leading Indicators.

Friday:  Federal Reserve Official John Williams speaks.

^{Source: Investors Business Daily - Econoday economic calendar; March 13, 2025
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.}

This Week: Companies Reporting Earnings

Wednesday:  General Mills, Inc. (GIS)

Thursday:  Nike, Inc. (NKE), Micron Technology, Inc. (MU), FedEx Corporation (FDX)

^{Source: Zacks, March 13, 2025. Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.}

“It takes 20 years to build a reputation and five minutes to ruin it."

– Warren Buffett

If You Didn’t Receive Your W-2

If you don’t receive your W-2 or 1099 by January 31 of the year, you are filing taxes, or if the information on these forms is incorrect, contact your employer/payer. If you still haven’t received the forms you need by the end of February, you can contact the IRS at 800-829-1040, and they may be able to help. 

When you contact the IRS, they will also reach out to the employer/payer for the information you need, and they will also send you Form 4852, a substitute for a W-2 or 1099. To do this, they will ask for your employer/payer’s name, address, and phone number (as well as your information).

This information is not a substitute for individualized tax advice. Please discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS¹¹

How to Make Hummus

Hummus is a dip made primarily from garbanzo beans and is great on pita bread, veggies, or chicken. Here’s how to make hummus:

1. In a food processor or blender, combine ¼ cup tahini (sesame paste) with ¼ cup fresh lemon juice—process for one minute. 
2. Add 2 tablespoons olive oil, ½ teaspoon ground cumin, ½ teaspoon of salt, and 1 minced garlic clove to the mix and process until well-blended in 30-second increments (about a minute). 
3. Add half a can (¾ cup) of rinsed chickpeas and process for 1 minute. Then, add the other half of the can and process another 1-2 minutes. 
4. If your hummus still has bits of chickpeas, process it a bit more while slowly adding 2-3 tablespoons of cold water. 
   

Tip adapted from Inspired Taste¹²

I twist, I turn, but I don’t have curves. You can twist me to fix me, but you may throw me into disarray in the process. Hours later, you may cast me away. What am I?

Last week’s riddle: What binds two people together yet touches only one person at a time?
Answer: An individual wedding ring.

Lake Winnipesaukee in Autumn
New Hampshire, USA

Footnotes and Sources

^{1. The Wall Street Journal, March 14, 2025}

^{2. Investing.com, March 14, 2025}

^{3. The Wall Street Journal, March 10, 2025}

^{4. CNBC.com, March 11, 2025}

^{5. CNBC.com, March 12, 2025}

^{6. CNBC.com, March 12, 2025}

^{7. The Wall Street Journal, March 14, 2025}

^{8. MarketWatch.com, March 12, 2025}

^{9. Newsweek, March 11, 2025}

^{10. MarketWatch.com, March 10, 2025}

^{11. IRS.gov, April 3, 2024}

^{12. Inspired Taste, October 3, 2024}