WEEKLY MARKET RECAP – MARCH 21, 2025

U.S. stock indexes fluctuated between modest daily gains and losses, ultimately finishing slightly higher after the previous week’s downturn pushed the S&P 500 into correction territory. By Friday’s close, the index posted a 0.5% weekly gain, ending a four-week losing streak.

The information technology sector and many of the Magnificent Seven stocks, which have driven market gains in recent years, underperformed the broader market again, extending their challenging start to the year. Year-to-date, the tech sector was down more than 9%, a sharp contrast to its nearly 37% surge in 2024.

The U.S. Federal Reserve maintained its cautious stance on the economy, leaving its benchmark interest rate unchanged. Policymakers reaffirmed expectations for two rate cuts by year-end but adjusted their outlook by lowering economic growth projections and raising inflation forecasts.

In Europe, stocks remained relatively stable for the week but continued to outperform U.S. markets year-to-date. A European stock index edged slightly higher, bringing its 2024 gain to around 14%, compared to the S&P 500’s 3% decline.

U.S. retail sales fell short of expectations for the second consecutive month. February sales rose just 0.2%, well below the forecasted 0.6% increase. Additionally, January’s originally reported 0.9% decline was revised downward to a steeper 1.2% drop.

The Bank of England took a more hawkish approach, holding interest rates steady following a cut in February. Policymakers voted 8-1 to maintain the rate at 4.50%, citing concerns over inflation risks and global trade uncertainty.

S&P 500 companies significantly increased share buybacks in 2024, spending nearly 19% more than the previous year. Total repurchases reached a record $943 billion, up from $795 billion in 2023, with a 7% increase in buybacks during the fourth quarter compared to the third.

A key inflation report set for release on Friday could provide clarity on the inflation outlook. The Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s preferred inflation gauge, showed a 2.5% annual increase in January, slightly below December’s 2.6% rate.