The S&P 500 Index ($SPX) (SPY) Monday closed up +0.64%, the Dow Jones Industrials Index ($DOWI) (DIA) closed up +0.85%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +0.55%. March E-mini S&P futures (ESH25) are up +0.66%, and March E-mini Nasdaq futures (NQH25) are up +0.53%.
Stock indexes closed moderately higher on Monday as a broad-based rally lifted the market, with more than 90% of the stocks in the S&P 500 posting gains on Monday despite weakness in the Magnificent Seven technology stocks. Stocks also received support on relief that Monday’s report on US Feb retail sales ex-autos rose as expected, easing concern that the recent plunge in consumer confidence would undercut consumer spending.
Stock index futures Monday initially posted overnight losses after Treasury Secretary Bessent said on Sunday that he’s not worried about the recent slump in stocks and that corrections are “healthy” and “normal,” dampening speculation the administration will step in to boost markets in some way.
US Feb retail sales rose +0.2% m/m, weaker than expectations of +0.6% m/m, although Feb retail sales ex-autos rose +0.3% m/m, right on expectations.
The US Mar Empire manufacturing survey of general business conditions index fell -25.7 to a 14-month low of -20.0, weaker than expectations of -1.9.
The US Mar NAHB housing market index unexpectedly fell -3 to a 7-month low of 39, weaker than expectations of no change at 42.
Global equity markets garnered support Monday on carryover from a rally in Chinese stocks to a 3-month high on better-than-expected economic news, a supportive factor for global growth. China Feb industrial production rose +5.9% year-to-date, stronger than expectations of +5.3% year-to-date. Also, China Feb retail sales rose +4.0% year-to-date, stronger than expectations of +3.8% year-to-date. However, China’s property market remains a drag on the economy after China Feb new home prices fell -0.14% m/m, the twenty-first consecutive month home prices have fallen.
Geopolitical risks are also undercutting stocks as the US launched weekend strikes on Yemen’s Houthi rebels. US Defense Secretary Hegseth said strikes would be “unrelenting” until the group stops attacking vessels in the Red Sea. The Houthi rebels said they would respond by attacking US vessels in the Red Sea.
Stocks have been under pressure over the past two weeks due to fears that US tariffs will weaken economic growth and corporate earnings. On March 4, President Trump imposed 25% tariffs on Canadian and Mexican goods and doubled the tariff on Chinese goods to 20% from 10%. On Sunday, Mr. Trump reiterated that he would impose reciprocal tariffs and additional sector-specific tariffs on foreign nations on April 2.
Market attention this week will focus on Tuesday’s reports on Feb housing starts (expected +1.1% m/m to 1.281 million) and Feb building permits (expected -1.6% m/m to 1.45 million), the Feb manufacturing production report (expected +0.3% m/m), and the Tue-Wed FOMC meeting (expected no change to the 4.25%-4.50% federal funds target range). The markets will also look to the Fed’s economic projections and dot-plot for the future path of interest rates, along with post-meeting comments from Fed Chair Powell.
The markets are discounting the chances at 1% for a -25 bp rate cut at the Tue-Wed FOMC meeting.
Overseas stock markets on Monday settled higher. The Euro Stoxx 50 closed up +0.77%. China’s Shanghai Composite Index climbed to a 3-month high and closed up +0.19%. Japan’s Nikkei Stock 225 rose to a 1-week high and closed up +0.93%.
Interest Rates
June 10-year T-notes (ZNM25) Monday closed down -1 tick. The 10-year T-note yield fell -0.6 bp to 4.306%. June T-notes Monday gave up an early advance after a rally in stocks curbed safe-haven demand for T-notes. T-notes on Monday initially moved higher on carryover support from a rally in 10-year German bunds. Also, the escalation of geopolitical risks has boosted safe-haven demand for T-notes after the US launched attacks on Houthi rebels in Yemen. Monday’s weaker-than-expected US economic news on Feb retail sales, the Mar Empire manufacturing survey of general business conditions, and the Mar NAHB housing market index were dovish factors for Fed policy and supported T-notes.
European bond yields on Monday moved lower. The 10-year German bund yield fell -5.7 bp to 2.818%. The 10-year UK gilt yield fell -2.8 bp to 4.638%.
ECB Vice President Guindos said he sees service inflation moderating and moving toward lower levels.
Swaps are discounting the chances at 55% for a -25 bp rate cut by the ECB at the April 17 policy meeting.
US Stock Movers
The strength in chip stocks on Monday was supportive of the overall market. Advanced Micro Devices (AMD) closed up more than +4%. Also, ARM Holdings Plc (ARM), Microchip Technology (MCHP), and GlobalFoundries (GFS) closed up more than +3%. In addition, Marvell Technology (MRVL), Micron Technology (MU), ON Semiconductor (ON), NXP Semiconductors NV (NXPI), and Texas Instruments (TXN) closed up more than +2%.
The weakness of the Magnificent Seven stocks on Monday was negative for the overall market. Nvidia (NVDA) closed down more than -1% to lead losers in the Dow Jones Industrials. Also, Amazon.com (AMZN) closed down more than -1%, and Alphabet (GOOGL) closed down -0.63%. In addition, Meta Platforms (META) closed down -0.44%. Finally, Tesla (TSLA) closed down more than -4% to lead losers in the Nasdaq 100 after Chinese rival BYD Co. unveiled a new system for electric cars that can charge a vehicle in five minutes.
Intel (INTC) closed up more than +6% to lead gainers in the Nasdaq 100 after Reuters reported that incoming CEO Lip-Bu Tan is considering significant changes to its chip manufacturing methods and AI strategies, including staff cuts to address the middle management layer.
Science Applications International Corp (SAIC) closed up more than +6% after reporting Q4 adjusted EPS of $2.04, stronger than the consensus of $1.65.
Norwegian Cruise Line Holdings (NCLH) closed up more than +4% after JPMorgan Chase upgraded the stock to overweight from neutral with a price target of $30.
BXP Inc (BXP) closed up more than +4% after Jeffries reinstated coverage of the stock with a recommendation of buy and a price target of $78.
Netflix (NFLX) closed up more than +3% after MoffettNathanson upgraded the stock to buy from neutral with a price target of $1,100.
Monday.com Ltd (MNDY) closed up more than +3% after D.A. Davidson upgraded the stock to buy from neutral with a price target of $350.
Nike (NKE) closed up more than +2% to lead gainers in the Dow Jones Industrials after TD Cowen raised its price target on the stock to $75 from $68.
Sprouts Farmers Market (SFM) closed up more than +2% after Deutsche Bank upgraded the stock to buy from hold with a price target of $190.
Incyte (INCY) closed down more than -8% to lead losers in the S&P 500 after its initial data from a late-stage trial of its povorcitinib to treat a skin condition known as hidradenitis suppurativa failed to meet analyst expectations.
Discover Financial Services (DFS) closed down more than -6%, and Capital One Financial (COF) closed down more than -3% on an unconfirmed report from Capitol Forum that the Department of Justice may oppose Capital One’s purchase of Discover Financial due to potential harm to the subprime sector.
Affirm Holdings (AFRM) closed down more than -4% after CNBC reported that rival company Klarna is set to displace it as the exclusive provider of buy now, pay later loans for Walmart.
CION Investment Corp (CION) closed down more than -3% after Wells Fargo Securities downgraded the stock to underweight from equal weight with a price target of $10.
Earnings Reports (3/18/2025)
Absci Corp (ABSI), Adverum Biotechnologies Inc (ADVM), Akoya Biosciences Inc (AKYA), Citi Trends Inc (CTRN), Golden Matrix Group Inc (GMGI), HealthEquity Inc (HQY), Inovio Pharmaceuticals Inc (INO), Maravai LifeSciences Holdings (MRVI), Neurogene Inc (NGNE), OmniAb Inc (OABI), Sandisk Corp/DE (SNDK), StoneCo Ltd (STNE), Trevi Therapeutics Inc (TRVI), Waldencast Plc (WALD).
