Stock Market Week March 10: What to Expect, Powerful Insights
This article offers a concise analysis of the U.S. stock market for the week of March 10 – 16, 2025. It examines the effects of tariffs and economic indicators on market movements and outlines key macroeconomic expectations for the period. Additionally, it provides a technical analysis of the S&P 500 and Nasdaq 100 indices, including a trading strategy for the upcoming week.
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Key Points
Market Turbulence: Impact of Tariff Uncertainty and Economic Indicators
The week of March 3rd presented significant challenges for U.S. stock markets. Central to these challenges were the Trump administration’s proposed tariffs, which have introduced considerable volatility due to their inconsistent implementation and the potential for retaliatory measures by other nations. The resulting uncertainty has raised concerns about the tariffs’ effects on global economic growth.
The core issue for the stock market lies in growth apprehensions, as doubts about economic growth prospects naturally extend to earnings growth projections. This has made investors wary of maintaining their previous enthusiasm for earnings, previously seen throughout 2024. According to Factset’s latest update, more than 80% of companies reported potential negative impacts on their earnings in their guidance for the upcoming quarters 2025.
The February employment report, released on Friday, March 7th, did little to alleviate these concerns. Although the report was not entirely negative, it failed to showcase robust economic strength.
Nonfarm payrolls increased by 151,000, while average hourly earnings rose by 0.3%. The unemployment rate held steady at 4.1%, and the average workweek declined to 34.1 hours. Notably, the labor force participation rate decreased, as did the employment-to-population ratio, dropping from 60.1% to 59.9%. The U-6 unemployment rate, which includes unemployed and underemployed workers, rose to 8.0% from 7.5%, indicating underlying labor market weaknesses.
The key takeaway from the employment report is its mediocrity, which fails to counterbalance the prevailing growth concerns underscored by recent economic data releases.
In the bond market, the 2-year note yield fell by six basis points to 3.91%, while the 10-year note yield declined by seven basis points to 4.22%. Nevertheless, the situation with 10-year bond yields remains stressed. I expect the yields to continue rising in the coming weeks as the economic data and inflation expectations worsen. In addition, the Fed’s interest rate policy remains neutral, meaning we should not expect interest rate cuts until June 2025.
U.S. Government Bond 10Year Yields
Highlights from the February Employment Situation Report include:
The employment report overshadowed favorable earnings results from companies like Broadcom (AVGO).
Additionally, the U.S. Treasury Secretary’s statement in a CNBC interview clarified the absence of a “Trump put,” and the term “Trump put” implies that the Trump administration would intervene to prevent the stock market from falling, essentially providing a safety net for investors. Instead, the U.S. Treasury Secretary, Scott Bessent, was asserting a “Trump call,” suggesting that the administration’s policies are expected to drive market growth, encouraging investors to buy during the current U.S. stock market correction. He underlined that the investors should expect a forthcoming “detox period,” because the market and economy have become heavily reliant on public spending.
The absence of a “Trump put” contradicts market expectations at the start of the year, adding another layer of complexity for investors navigating tariff uncertainty and economic growth concerns.
Consequently, the S&P 500 Index closed the week down 3.32%, the Nasdaq 100 Index declined by 3.76% week-over-week, and the Dow Jones Industrial Average dropped by 2.50% week-over-week.
Market Dynamics for the Week of March 10-16
For the upcoming week, key economic indicators include the U.S. Job Openings and Labor Turnover Survey (JOLTS) on Tuesday, followed by the U.S. Core Consumer Price Index (CPI) data on Wednesday. Thursday will see the release of the U.S. Initial Jobless Claims and Producer Price Index (PPI) data, with the week concluding with the University of Michigan’s Consumer and Inflation Expectations report on Friday.
As previously noted, job openings experienced an unexpected decline to 7.6 million in December 2024, down from 8.16 million in November 2024. Current consensus anticipates a further decrease to 7.5 million in January 2025, reflecting a cooling labor market.
U.S. Job Openings Forecast, QoQ in 2025
The growth of the U.S. Core CPI is projected to slow to 0.27% month-over-month in February. Should the data align with expectations, there may be minor positive movements in the stock market. At the same time, in the first quarter ending on March 31, 2025, the inflation should increase to 3.21% YoY. Moreover, the U.S. Bureau of Labor Statistics projected a further increase in U.S. inflation up to 3.23% YoY in the second quarter of 2025. The main reason is the unfavorable impact of tariffs.
U.S. CPI, QoQ Forecast for 2025
In addition, the Michigan Consumer Expectations, which should be released on March 14, will likely weaken due to imposed tariffs and rising consumer prices.
Michigan Consumer Expectations Index
Michigan’s 5-year inflation expectations will likely increase to the highest level since 2021.
Michigan 5-Year Inflation Expectations
As a result, a bullish reversal of the prevailing downward trend in the U.S. stock market is unlikely in the near term. Macroeconomic data is expected to take a backseat, with the resolution of the Ukraine-Russia conflict being the primary market driver.
The Trump administration has recently halted intelligence sharing and military aid to Ukraine, aiming to push Ukraine and Russia toward peace negotiations. President Trump has expressed dissatisfaction with Ukrainian President Zelenskyy’s stance, suggesting that negotiations with Russia could be more straightforward.
Nonetheless, the situation remains intricate, with ongoing military activities and significant geopolitical considerations. The outcome will hinge on various factors, including Ukraine’s and Russia’s responses and international diplomatic initiatives.
Additionally, as I already mentioned above, Trump’s tariff policy contributes to market volatility and downward pressure. Overall, I maintain a bearish outlook on the U.S. stock market for the forthcoming week. Indices will likely continue their gradual decline, interspersed with short-term upward movements.
Technical Analysis of U.S. Stock Market Indices: Strategic Insights for March 10-16, 2025
As we delve into the technical analysis of the U.S. stock market indices for the upcoming week of March 10-16, 2025, it’s clear that the S&P 500 Index is currently exhibiting bearish signals. On the daily chart, the Index is hovering near the critical 200-day Exponential Moving Average (EMA) level of 5,710.5. Our bearish forecast for the week of March 3-7 proved to be accurate, with a complete realization of the predicted downward trend. Notably, the trading volume during this period was significantly higher during the Index’s decline compared to its upward movements.
When trading volume surges amidst a decline, it typically reflects heightened investor activity and concern. Several conclusions can be drawn from this observation:
On a positive note, increased volume during a decline can assist in price discovery, aiding the market in establishing a new equilibrium price level. Although this process can be volatile, it is essential for determining fair market value.
For traders with a high-risk tolerance, high-volume declines may present buying opportunities. Such traders might perceive the drop as an overreaction and seek to acquire shares at a reduced price, anticipating a potential rebound the following day. This strategy usually works for day traders.
Our analysis indicates that the S&P 500 Index is likely to continue its downward trajectory in the coming week. In an optimistic scenario, investors might expect the Index to trade within the range of 5,710 and 5,974, corresponding to the 200-day and 100-day moving averages. For mid to long-term investors, maintaining cash reserves appears to be the most prudent strategy for the week ahead.