S&P 500 sees worst week in six months amid economic worries
U.S. stock market struggles after S&P 500 worst performance since September
Stock futures plunged Sunday night, signaling more turmoil ahead for Wall Street after a rough start to March. Major indexes are under pressure as economic uncertainty continues to rattle investors.
Key Takeaways
- S&P 500, Nasdaq, and Dow futures fell, with the S&P 500 futures dropping 0.8% and Nasdaq 100 futures slipping nearly 1%. This marks a continuation of the selloff seen in early March.
- Economic policies, tariff negotiations, and inflation are creating volatility. Investors are focused on upcoming data, including CPI and PPI, to gauge the trajectory of inflation.
- Federal Reserve Chair Jerome Powell emphasized the need for clarity before making rate adjustments, while the Biden administration's economic policies remain a factor in market dynamics.
Futures Drop as Wall Street Faces Another Rough Week
U.S. stock futures took a hit on Sunday evening, continuing a troubling trend after a challenging first week of March. S&P 500 futures dropped by 0.8%, while Nasdaq 100 futures fell almost 1%, and Dow Jones futures dropped 268 points (0.6%), reports Cryptopolitan.
S&P 500 index chart (Jun 2024 - Feb 2025) Source: TradingView
This follows a difficult week where the S&P 500 plunged 3.10%, the Dow fell 2.37%, and the Nasdaq Composite saw a significant 3.45% drop—its worst performance since September.The selloff was exacerbated by ongoing uncertainty surrounding Washington’s economic policies, tariff negotiations with Mexico and Canada, and concerns over inflation, pushing investors to seek safer assets.
Key Economic Reports Looming
This week is shaping up to be eventful with several crucial economic reports on the horizon. The New York Fed’s consumer expectations survey will be released on Monday, with a focus on inflation in the coming days. Wednesday will bring the February Consumer Price Index (CPI), followed by the Producer Price Index (PPI) on Thursday. On Friday, the University of Michigan’s consumer sentiment index will be released.
Bill Adams, chief economist at Comerica Bank, noted that while inflation is expected to have moderated somewhat in February, tariffs and trade uncertainties continue to push producer prices higher. These reports are expected to add further volatility to the market, with investors keenly watching for any signs of worsening inflationary pressures.
Fed’s Stance and Political Uncertainty
Federal Reserve Chair Jerome Powell addressed market concerns on Friday, emphasizing the need to "separate the signal from the noise" when assessing economic data. He reiterated that the central bank is not rushing to adjust interest rates and will wait for more clarity before making decisions.
The Biden administration's economic policies remain a wildcard for the markets, especially amid ongoing tariff negotiations. While President Trump’s former Treasury Secretary Scott Bessent acknowledged that the economy is showing signs of improvement, investors are unsure whether Washington will intervene with measures to stabilize the market. With Trump stating, “I’m not even looking at the stock market,” last week, it’s unlikely significant intervention will come soon.
With economic uncertainties, tariff disputes, and inflation concerns looming, Wall Street is bracing for another volatile week. As important economic data is released, investors will be closely monitoring for signs of inflationary pressure and any potential policy shifts from the Fed or Washington.
Reminder, a $439 billion rally in Chinese tech megacaps this year has propelled them far ahead of their once-dominant US peers, and investors believe there’s still room for further growth.
