Weekly Market Commentary March 10th to March 14th 2025

It was a light week for economic data releases, but what was reported certainly carried a lot of weight. We saw inflation fall in both consumer and producer prices for February compared to the prior month. And both came in below expectations, too. The time period covered only partially captures the new administration’s tariff strategy so look for more price volatility to come, but in the meantime the good news was welcomed by all. Consumer Prices (CPI) fell to 2.8% year-over-year while Producer Prices (PPI) dropped to 3.2%. When removing the volatile food and energy sectors, the CPI came in at 3.1% (compared to 3.3% in January) and the PPI came in at 3.4% (3.6% in January). The good news wasn’t enough to counter the investor skepticism that tariffs will eventually cause higher prices, and the markets reacted accordingly. The administration’s confusing message and erratic roll-out of tariffs to our largest trading partners is causing investors to flee for safer waters…mainly gold. This commodity hit an all-time high on Friday, temporarily breaking through the $3000/oz price for the first time ever. Investors don’t like instability and volatility and are punishing riskier markets.

Elsewhere in the economy, the JOLTS Job Openings survey showed 7.74 million jobs available, continuing the slow decline since March of 2022 when there were over 12 million available. Initial Jobless Claims for the week came in at an on-trend 220,000. Remember, employment statistics such as these are great forward-looking predictors of economic growth or decline.

As mentioned above, the equity markets were affected more by inconsistent messaging from Washington than the good news on inflation. All three major indices were down for the week with the S&P500 off 2.3%; the Dow Jones Industrials down 3.1%; and the NASDAQ dropping 2.4%. Bonds were basically flat on the week with the 10-Year U.S. Treasury closing at 4.31%.

Next week’s important economic data releases include February’s Retail Sales, Housing Starts and Building Permits, Existing Home Sales, and a Fed decision on interest rates. Currently there’s a 99% chance the Fed will leave short-term rates at their current level.