Mixed earnings reports contributed to the week’s market volatility.
U.S. stocks snapped a four-week losing streak to end the week higher. Despite continued volatility, all major averages posted moderate weekly gains. Large-cap stocks led the rebound, driven by developments related to the economic conditions, the Federal Reserve’s policy decisions, and corporate earnings reports.
The S&P 500 ended March 21 at 5,667, up by 0.51 percent for the week; the Dow Jones Industrial Average fared better, up by 1.20 percent to close at 41,985; the Nasdaq ended the week at 17,784, up by 0.17 percent; and the small-cap Russell 2000 was up by 0.63 percent to finish at 2,056.
Large-cap stocks led the list of winners in the market turnaround.
Large-cap stocks refer to the stocks of large, well-established companies with a market capitalization of $10 billion or more, typically included in the Dow Jones and the S&P 500 equity indexes. They are generally less risky than mid- and small-cap stocks and tend to perform better during turbulent times. For instance, Boeing, a Dow Jones component, gained 10 percent for the week on news that it had secured a major Air Force contract. United Healthcare and JPMorgan, two other Dow members, gained 5.77 percent and 3.95 percent, respectively.
Trade during the week was volatile, influenced by economic headlines.
One key update was the February retail sales report, released on the morning of March 17, which showed a recovery from a downwardly revised decline in January, although it fell short of market expectations. The weaker-than-expected sales data contributed to a decline in bond yields, providing support to equities and helping to push the day’s trade higher. Shares pulled back on March 18, led by a nearly 2 percent decline in the Nasdaq, as the kickoff of Nvidia’s week-long conference failed to impress tech investors.
The situation changed on the afternoon of March 19, following the Federal Open Market Committee’s decision to leave its policy interest rate, the federal funds rate, unchanged.
This did not make headline news for Wall Street, as the decision had been widely anticipated by market participants and, therefore, factored into their expectations.
What was unexpected was Federal Reserve chairman Jerome Powell’s statement during the press conference following the meeting that any shortfall from Washington’s proposed tariffs would be “transitory.” In addition, the Federal Open Market Committee reiterated its intention to cut interest rates twice this year.
“Jerome Powell’s press conference was the steady hand that the markets needed right now and is helping the market find its footing,” Clark Bellin, president and chief investment officer of Bellwether Wealth, told The Epoch Times.
