Fed Optimism Sparks Rebound After Losing Streak:
Stocks posted strong gains last week, marking a sharp rebound after a four-week losing streak. Investors responded positively to optimistic remarks from the Federal Reserve, which signaled a more measured approach to future interest rate hikes.
The S&P 500 Index rose 0.51%, while the Nasdaq Composite Index picked up 0.17%. The Dow Jones Industrial Average led, gaining 1.20%. The MSCI EAFE Index, which tracks developed overseas stock markets, rose 0.75%.1,2
Source: Bloomberg Finance, L.P. (Performance data normalized 2/6/25 = 0)
A Solid Week
Stocks opened the week higher despite weaker-than-expected retail sales. On Tuesday, stocks pulled back on disappointing economic data and renewed Middle East tensions.3,4
Stocks roared higher Wednesday as investors looked forward to the Federal Reserve’s meeting. As widely expected, the Fed kept rates steady, but Fed Chair Powell’s comments buoyed investors’ spirits.5
Stocks dipped Thursday and opened lower Friday, but investors showed some confidence by pushing prices higher into Friday’s close.6
Sources: U.S. Department of the Treasury, Board of Governors of the Federal Reserve System, Charles Schwab
The Fed Stays Positive
Amid all the market turbulence of late, the Fed was a steadying influence. At his post-meeting press conference, Fed Chair Powell stressed that the economy remained strong and suggested that any impact from tariffs on inflation would be short-term.
But the primary reason investors cheered came down to this: most Fed officials still penciled in two interest rate cuts for this year. In late January, Powell said the central bank was in no hurry to adjust its policy stance, which unsettled the markets.7
This Week: Key Economic Data
Source: Bloomberg Finance L.P.
This Week: Companies Reporting Earnings
Source: EarningsWhispers
Author
Gary Aiken
Chief Investment Officer
Concord Asset Management
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Footnotes and Sources
1The Wall Street Journal, March 21, 2025
2Investing.com, March 21, 2025
3The Wall Street Journal, March 17, 2025
4CNBC.com, March 18, 2025
5The Wall Street Journal, March 19, 2025
6The Wall Street Journal, March 21, 2025
7CNBC.com, March 18, 2025
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