The U.S. stock market experienced a roller-coaster week, with major indices posting losses despite ending on a positive note Friday, March 7, 2025. Investors navigated a slew of economic reports, Federal Reserve commentary, and significant corporate earnings, all of which shaped the week’s volatile market sentiment.

• Dow: Down 2.4% for the week.
• S&P 500: Down 3.1%, marking its worst week since September 2024.
• Nasdaq: Down 3.5%, extending its losing streak to three weeks.

Dow, S&P 500, and Nasdaq Suffer Weekly Stocks Declines

The Dow Jones Industrial Average, the S&P 500, and the tech-heavy Nasdaq Composite rebounded Friday but closed the week in the red. The Dow fell 2.4% over the week, while the S&P 500 and Nasdaq posted steeper drops of 3.1% and 3.5%, respectively. This marked the third consecutive week of losses for the S&P 500 and Nasdaq.

Friday’s gains came after early-session losses were reversed following reassurances from Federal Reserve Chair Jerome Powell, signaling that the central bank remains in no rush to adjust monetary policy. The recovery was led by a rally in select technology and AI-related stocks, but it wasn’t enough to offset the broader downturn seen earlier in the week.

February Jobs Report Sparks Economic Concerns

The Labor Department’s Non-Farm Payrolls (NFP) report for February added to the caution in markets, showing the U.S. economy added 151,000 new jobs, falling short of economists’ expectations. The unemployment rate also ticked slightly higher to 4.1%, reflecting some cracks in what has otherwise been a solid labor market.

This report heightened fears of a potential economic slowdown, particularly as markets grappled with concerns about inflationary pressures and their impact on corporate profitability. Additionally, persistent worries about tariffs and global economic conditions added to investor unease, further fueling the week’s sell-off.

Powell’s Speech Offers Reassurance Amid Uncertainty

Federal Reserve Chair Jerome Powell helped temper market jitters during his remarks at the University of Chicago Booth School of Business on Friday. Powell emphasized that the U.S. economy is in good shape and stressed the Fed’s ability to “wait for greater clarity” on various economic pressures before making any changes to interest rates.

He highlighted the “solid” labor market and appeared confident that inflation was on track to meet the Fed’s 2% target. Powell’s message of restraint and patience was welcomed by investors, easing fears of aggressive monetary policy adjustments. His cautionary tone on separating meaningful economic signals from “noise” provided a backdrop for Friday’s late-day gains.

Corporate Earnings Reports Drive Outsize Stock Moves

• Broadcom surged 8.6% on strong AI-driven earnings.
• Walgreens rose 7% after $10 billion buyout news.
• Hewlett Packard fell 12% on weak guidance, cost cuts.

Amid macroeconomic concerns, corporate earnings played a pivotal role in shaping individual stock performance. Notable movers included Broadcom, which surged 8.6% after reporting strong quarterly earnings driven by booming demand for AI-related semiconductors. The chipmaker’s upbeat outlook for the coming quarter further fueled investor optimism.

Walgreens Boots Alliance also jumped 7% following the announcement of a $10 billion buyout deal with private equity firm Sycamore Partners. However, not all earnings impressed. Hewlett Packard Enterprise shares plunged 12% after the company delivered weaker-than-expected guidance and laid out cost-cutting measures, including workforce reductions.

Technology Sector Under Pressure

• Tech sector led losses, Nasdaq dropped 3.5%.
• Tesla declined for the seventh consecutive week.
• AI stocks like Palantir rose 5.5% Friday.
• AppLovin gained 4%, showing selective tech optimism.

The technology sector, a bellwether of growth and investor sentiment, bore the brunt of this week’s losses. The Nasdaq Composite’s decline of 3.5% was driven by uncertainty around AI overexpenditure and issues facing key players such as Tesla, which posted its seventh consecutive week of declines. Elon Musk’s focus on governmental duties, combined with tariff uncertainties, compounded investor fears.

Despite these challenges, certain AI-related stocks staged a recovery on Friday. Palantir and AppLovin recorded gains of 5.5% and 4%, respectively, underscoring selective optimism in the broader tech sector.

Impact of Trump Trade Tarrifs

This week, President Donald Trump imposed sweeping tariffs on imports from Canada, Mexico, and China, citing national security concerns and the need to curb fentanyl trafficking. The tariffs include a 25% levy on most goods from Canada and Mexico, with Canadian energy products facing a 10% tariff. Additionally, tariffs on Chinese imports were doubled to 20%.

In response, Canada announced retaliatory tariffs on $20.7 billion worth of U.S. goods, including orange juice, wine, and motorcycles, with further measures planned if the U.S. tariffs persist. Mexico also vowed retaliation, while China imposed 10-15% tariffs on U.S. agricultural exports and expanded export restrictions on American companies.

The tariffs have already disrupted markets, with U.S. businesses near the Canadian border reporting price hikes and supply chain challenges. Economists warn of potential inflationary pressures and a contraction in U.S. GDP, as the trade war threatens to upend $2.2 trillion in annual trade.

How Trump’s Tariffs Shook the Stock Market

This week, President Donald Trump’s tariffs on Canada, Mexico, and China sent ripples through the financial markets, creating heightened volatility and sparking investor caution. The tariffs triggered immediate retaliatory measures from all three trading partners, amplifying uncertainty about trade relations and global economic growth.

Investor Sentiment and Market Volatility

The announcement of the tariffs led to widespread market sell-offs as investors grappled with the potential long-term repercussions. Major indices, including the Dow and S&P 500, experienced declines, wiping out gains from earlier weeks. Traders cited fears of higher inflation, disrupted supply chains, and reduced international trade volume as key concerns. The Federal Reserve’s recent warnings about fragile economic conditions added further apprehension, deterring risk-taking.

• The tariffs disproportionately affected sectors reliant on global trade, with manufacturing and industrial sectors hit hardest. Automakers like General Motors and Ford saw declines due to strained production costs from tariffs on cars, trucks, and auto parts.
• Consumer goods companies with supply chains spanning North America and China faced sell-offs, driven by fears of rising input prices.
• Retailers and electronics manufacturers, such as Target, hinted at potential price hikes to offset new trade levies. Tech conglomerates reliant on imported components faced added scrutiny, weakening tech-heavy indices like the Nasdaq.
• Agriculture stocks suffered as China imposed retaliatory tariffs on U.S. farm exports, impacting commodity prices for crops like soybeans and sorghum. Producers scrambled for alternative buyers amid demand erosion in international markets.
• Trade policy uncertainty weighed heavily on broader economic sentiment, with economists highlighting bleak GDP forecasts. The Federal Reserve Bank of Atlanta slashed its Q1 GDP growth forecast to a contraction of 2.8%, raising fears of a recession.
• Persistent trade disputes risk undermining corporate earnings, cutting profit margins, and deterring capital expenditures. Many companies delayed investments or expansion plans, further dampening stock performance across industries.

Broader Market Outlook Remains Uncertain

While Friday’s rebound provided a silver lining to an otherwise challenging week, the broader market outlook remains clouded by geopolitical and economic uncertainties. The S&P 500 and Nasdaq have now suffered declines in five of the past six weeks, and lingering concerns about job growth, inflation, and corporate health could further weigh on sentiment going forward.

Investors will closely watch upcoming trade talks or potential tariff adjustments for any signs of relief. Commerce Secretary Howard Lutnick hinted at partial negotiations with Canada and Mexico, which temporarily steadied their currencies, but broader resolutions remain elusive. The stock market’s immediate trajectory hinges on whether these trade tensions escalate or ease in the weeks to come. Until clarity is achieved, market volatility and sector-specific sell-offs are likely to persist.

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