WEEKLY MARKET RECAP – MARCH 7, 2025

Trade tensions continued to pressure the market, with the S&P 500 falling for a third consecutive week and recording its steepest weekly decline since last September. The index posted a -3.1% total return, slightly outperforming the NASDAQ’s -3.4% drop, while the Dow declined 2.3%.

On Thursday, the NASDAQ officially entered correction territory, as steep losses in technology stocks pushed the index more than 10% below its recent high from a few weeks prior and its all-time peak set nearly three months ago. Although the S&P 500 and Dow also saw sharp declines from their recent highs, they remained above the 10% correction threshold.

Financial markets were rattled by escalating trade disputes, as the U.S. imposed 25% tariffs on most Canadian and Mexican imports on Tuesday while also raising existing tariffs on Chinese goods. In response, all three trading partners introduced retaliatory measures, prompting U.S. officials to suspend some tariffs on Canadian and Mexican goods, including automobiles, for a month.

The U.S. economy added 151,000 jobs in February, slightly below analysts’ expectations but up from the previous month’s revised total of 125,000. However, job growth has shown signs of moderation, with monthly gains averaging 168,000 over the past year.

The U.S. dollar experienced its steepest weekly decline since November 2022, falling 2.4% against a basket of major currencies as of Friday afternoon. Meanwhile, the euro surged, posting its most substantial weekly gain against the dollar since 2009 after European governments announced plans for increased stimulus spending.

Large-cap growth stocks underperformed their value counterparts by a significant margin, reinforcing their resurgence in 2025 after growth stocks led the market in 2024. The growth index declined 3.9% on a total return basis for the week, while the value index fell 2.4%.

European stocks rallied on Thursday following the European Central Bank’s decision to cut interest rates for the sixth consecutive policy meeting. The move was aimed at addressing sluggish economic growth and geopolitical uncertainty, prompting increased government spending on infrastructure and defense.

Investors will turn their attention to Wednesday’s upcoming Consumer Price Index report, which will indicate whether inflation continued its recent trend of coming in slightly hotter than expected. The latest CPI data showed core inflation—excluding food and energy—rising at an annual rate of 3.3% in January, exceeding economists’ forecasts and slightly above December’s reading.