3-24-25 Monday Minute
By Dan Stober on March 24, 2025
After a positive start in the markets last week, downward pressure resumed on Tuesday with the NASDAQ once again leading the markets lower. The ceasefire between Israel and Hamas appears to have collapsed as Israel carried out airstrikes in the Gaza Strip on Monday night. The strikes were the heaviest fighting since the two sides agreed to a ceasefire in January. On Wednesday the Federal Reserve left rates unchanged as was widely expected. The Fed also announced it will slow its balance sheet reduction program, known as quantitative tightening (QT). Starting in April, holdings of U.S. Treasury securities will be reduced by $5 billion per month, down from $25 billion currently. The markets rallied on the day. Recent data suggest that economic activity is still expanding, and the labor market remains solid despite government layoffs. Overall, we continue to believe the Fed remains on its easing path, though the pace has slowed, with the fed funds rate likely settling in the 3.5%–4.0% range this year. Lower interest rates should reduce borrowing costs for individuals and businesses, which is supportive of the economy and corporate earnings. The markets ended the week higher with the DOW up 1.2%, S&P500 up .5%, and the NASDAQ up .2%. Continuing the short term trend, stocks are sharply higher this morning to start the week thanks to encouraging reports on tariffs. President Donald Trump’s planned round of reciprocal tariffs set to begin on April 2 may be more targeted than we thought, according to multiple media reports. While still lacking full clarity on Trump’s plans, the big winners, for now, are autos and tech hardware. Important economic releases this week include consumer confidence and PCE inflation.
https://www.cnbc.com/2025/03/23/stock-market-today-live-updates-.html