Stock Market Update – Monday, March 17, 2025

Stock Market Update – Monday, March 17, 2025

Equities kicked off the week on a strong note, with broad-based gains across the major indices, despite some weakness in the mega cap tech stocks. Market breadth was solid, indicating broad participation in the rally. However, late-session selling pressure—potentially linked to zero-days-to-expiration (0DTE) options activity—trimmed gains into the close.

• S&P 500 (SPX): +0.7%

• Nasdaq-100 (QQQ): +0.6%

• Russell 2000 (IWM): +1.2%

Away From Stocks:

In the fixed-income space, the Treasury yield curve flattened as short-term rates edged higher. The two-year yield rose 4 basis points (bps) to 4.06%, while the 30-year bond yield ticked down slightly to 4.60% from 4.62%.

Commodities saw modest moves:

• WTI crude oil gained slightly to $67.50 per barrel.

• Gold rebounded above the key psychological level of $3,000 per ounce.

• Bitcoin held steady just above $84,000.

• The VIX (volatility index) declined below 21, signaling reduced market anxiety.

Fed Watch: Key Event This Week

This week, all eyes are on the Federal Reserve’s Open Market Committee (FOMC) meeting, with the central bank set to release its official interest rate decision on Wednesday. While markets overwhelmingly expect no change in policy, the statement and Fed Chair Jerome Powell’s 2:30 p.m. ET press conference will be closely analyzed for signals about future monetary policy direction.

Why This Meeting Matters:

1. Rate Path Clarity – Investors will look for any hints about the Fed’s stance on potential rate cuts later in the year, especially in light of recent inflation data.

2. Economic Outlook – Powell’s comments could offer insights into the Fed’s assessment of growth, labor market conditions, and financial stability.

3. Tariff Implications – This meeting is particularly notable as it is the last before April 2, when the White House is set to make a key decision on tariffs. Any mention of trade policy risks in the Fed’s statement or Powell’s Q&A could impact market sentiment.

The Fed’s Dilemma: Dovish Shift Ahead?

While no rate cut is expected in March, the focus will be on whether Fed Chair Jerome Powell maintains the dovish tone he adopted two weeks ago.