What happened last week…
Tariff news continues to dominate headlines. Highlights from last week included a 25% tariff on steel and aluminum imports (and reciprocal tariffs from the European Union and Canada), a threatened 50% tariff on Canadian steel and aluminum that was later rescinded after a 25% surcharge on electricity exports to the U.S. was paused, and a potential 200% tariff on alcohol from European nations in response to a 50% tariff placed on American whiskey. Regarding the stock market’s performance over the past several weeks, Treasury Secretary Scott Bessent said, “We’re focused on the real economy… I’m not concerned about a little bit of volatility over three weeks.” Bessent added that the focus is on the medium and long-term.
On Thursday, the S&P 500 dipped into correction territory, down about 10% from its record high achieved in February. All three major indices saw notable rebounds on Friday: DJIA (1.65%), S&P 500 (2.13%), NASDAQ (2.61%). Weekly performances for the three major indices were as follows: DJIA (-3.07%), S&P 500 (-2.27%), NASDAQ (-2.43%).
The United States proposed a 30-day ceasefire between Ukraine and Russia, which has been accepted by Ukraine but still needs approval from Russia. Russia said it is open to the idea of a ceasefire but stated there are issues that still need to be discussed.
The inflation rate year-over-year for February beat expectations (2.9%) as it decreased to 2.8% from 3.0%, which snapped a streak of four consecutive monthly increases. It is the lowest reading since November 2024 (2.7%). The rate peaked at 9.1% in June 2022. Meanwhile, the core inflation rate year-over-year for February beat expectations (3.2%) as it decreased to 3.1% from 3.3%. It is the lowest reading since April 2021 (3.0%).
Happening this week…
On Wednesday, the Federal Open Market Committee (FOMC) will make its second interest rate decision of the year. According to the CME FedWatch Tool, as of March 14, there is a 99.0% probability that interest rates will remain at 4.25% to 4.50%. After its January meeting, the FOMC left interest rates unchanged, which broke a streak of three consecutive meetings of a reduction.
On Thursday, existing home sales for February are expected to decrease to 3.92 million from 4.08 million, which was the first monthly decline since September 2024.
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- The Rockline Team
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