Published: Thursday, March 20, 2025 · 8:10 PM | Updated: Thursday, March 20, 2025 · 8:10 PM
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U.S. stocks edged lower as markets assessed the Federal Reserve’s monetary policy outlook. The Fed recently held interest rates steady and projected two rate cuts this year. Initial jobless claims slightly increased, but layoffs remain low. The Dow Jones fell 80.19 points (0.19%) to 41,884.44, the Nasdaq dropped 125.71 points (0.71%) to 17,625.08, and the S&P 500 slipped 28.25 points (0.50%) to 5,647.04.
Despite the decline, tech stocks had previously led gains, with the S&P 500 down over 7% from its all-time high but potentially ending a four-week losing streak. The Fed maintained its rate, reduced economic growth forecasts, and increased inflation expectations, predicting two rate cuts of 25 basis points each this year.
Fed Chair Jerome Powell highlighted tariff uncertainties and their potential temporary impact on inflation. The Fed’s statements briefly boosted market sentiment, suggesting any tariff-induced inflation could be short-lived, and there remains room for rate cuts later in the year.
Market analysts expressed mixed views on the Fed’s dovish stance and the impact of trade policies. The CME Group’s Fedwatch tool indicates a 60% chance of a 25 basis point rate cut in June.
Global economic concerns persist as European Central Bank President Christine Lagarde warned that EU retaliation to U.S. tariffs could slow Eurozone growth. Meanwhile, U.S. President Trump continues to pressure the Fed for rate cuts, despite differing economic growth forecasts.
Moody’s warned of a “disturbingly high” risk of U.S. recession, citing the impact of Trump’s tariff agenda. Corporate earnings reports are due from Nike, FedEx, and Micron Technology. Economic data showed a slight rise in jobless claims but overall low layoffs, and a surprise rebound in February’s existing home sales.
In corporate news, Nvidia launched Blackwell Ultra, Tesla recalled Cybertrucks due to exterior panel issues, and Microsoft announced a new cloud region in Malaysia. Apple is expected to continue using TSMC’s N3P process for its A20 chip. Alphabet raised its offer to acquire cloud security startup Wiz for $32 billion.
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