The stock market rallied Friday, with the Dow Jones Industrial Average and Standard & Poor’s 500 Index each gaining just over ½ %, while the NASDAQ Composite climbed .71%. The end of week rally came due in large part to comments from Federal Reserve Chair Powell, who stated the economy is in a “good place”. Despite Friday’s gains, the major stock market averages still ended with significant weekly losses. The Dow fell 2.4% to 42,801.72 – the S&P 500 fell 3.1% to 5,770.20 – the NASDAQ Composite shed 3.5% to 18,196.22.
The primary factor behind the market decline last week was worry over the impact/ramifications/outlook regarding tariffs. That the market does not like uncertainty, is on old Wall Street adage, and there was certainly plenty of uncertainty over tariffs last week, which dominated the financial headlines and the negative mood of the stock market.
Elsewhere, last week, was the release of the all-important Jobs Report. The U.S. Bureau of Labor Statistics reported the economy added 151,000 jobs last month, and the unemployment rate ticked up a notch to 4.1%. On balance, this report was a bit weaker-than-expected and increased belief with many investors that the economy is softening. Speaking on CNBC Friday, Treasury Secretary Scott Bessent said the economy might be starting to “roll a bit”, which also caught the market’s attention.
Looking to the week ahead, market participants will be most focused on the continuing and ever-changing headlines and developments surrounding tariffs. Away from that, we’ll get a couple key earnings reports along with an important read on inflation. Two large cap software companies report this week, with Oracle announcing results today, and Adobe reporting on Wednesday. Also on Wednesday, the BLS is scheduled to report the Consumer Price Index for February. Consensus expectations are for a 2.9% year-over-year increase, while the core CPI, which excludes food and energy prices, is seen rising 3.2%.
For a current look at the stock market, the NASDAQ is now trading in correction territory (a drop of 10% or more). Corrections are always painful, and we have not had one in a while. Keep in mind, however, they are a normal part of investing and inherent in the stock market. Remember, especially during volatile times, we believe in time in the market, not timing the market. Short term volatility should not interfere with long term plans!
As always, please contact us with any questions or if you would like to schedule a meeting.
All the best – Southport Station Financial Management, LLC