US Weekly Report: Sense of calm return to Wall Street for now

Sense of calm return to Wall Street for now

The absence of tariff headlines offered Wall Street some breather to start the new week, as major US indices look to some recovery following its recent sell-off. The Nasdaq is up 0.3%, the S&P 500 rose 0.6%, while the DJIA advanced 0.6% overnight. Looming concerns around US growth risks and tariff uncertainties continue to keep valuations under scrutiny, as overnight performance highlighted a preference for the S&P 493 over the Magnificent Seven stocks. For now, the rebound remains a tactical bounce rather than a sustained recovery, given the lack of a clear positive catalyst. Tariff concerns are not off the table but merely postponed, with the looming April 2 deadline for reciprocal tariffs still in focus.

Look-ahead: Federal Open Market Committee (FOMC) meeting

For the upcoming meeting, market expectations remain firmly priced for US policymakers to keep the Federal Reserve (Fed) Funds rate on hold at 4.25% - 4.50%, with the focus likely to concentrate around the rate outlook. The key question to be answered will be whether recent downside economic surprises and tariff uncertainties could prompt the Fed to consider accelerating rate cuts.

This week, softer-than-expected headline US retail sales have added to a string of weaker consumer sentiment, easing inflation, and cooling labour market conditions—factors that complicate the Fed’s policy path. Markets currently anticipate the next 25 basis point (bp) rate cut to be in June, with a total of 50 - 75 bp cumulative cuts by the end of this year. The upcoming economic forecasts will be critical in shaping these expectations, as investors assess how economic risks and tariff developments might sway the Fed’s policy stance.

US Tech 100: More work needed to override bearish trend

Extreme bearish sentiment over the past week has created room for a near-term tactical bounce across major US indices, with the Nasdaq 100 rebounding nearly 3.5% from its recent low. On the four-hour chart, the index has temporarily broken above a falling channel, attempting to establish a short-term trend reversal. Notably, its four-hour relative strength index (RSI) has reclaimed its midline for the first time since February 22, 2025.

However, whether the recent market decline was a flush-out or signals a sustained trend reversal remains uncertain. This week's close could be pivotal, as the index is currently back to retest a primary trendline resistance, which has given way in early March this year. A move back above the psychological 20,000 level may offer greater conviction for the bulls, potentially confirming the recent trendline breakdown as a false move.

Key Levels:

• R2: 20,527

• R1: 20,000

• S1: 19,548

• S2: 19,100

Source: IG charts

Source: IG charts

Sector performance

Sector performance over the past week was mixed, with the broader index gaining 1.3% after briefly entering correction territory. Technology, energy, and financials led the rally, while healthcare, consumer discretionary, and consumer staples lagged, reflecting no clear sector-wide trend. Among the Magnificent Seven, NVIDIA surged 11.7%, and Tesla gained 7.1%, while Apple declined 5.9%. Into the new week, if the Fed were to display an inclination towards accelerating its rate-cutting process, one to watch if rate-sensitive and relatively inexpensive sectors such as utilities, real estate, industrials and materials may see increased traction.

Source: Refinitiv

Source: Refinitiv

Source: Refinitiv
*Note: The data is from 11th – 17th March 2025.

Source: Refinitiv
*Note: The data is from 11th – 17th March 2025.

Source: Refinitiv
*Note: The data is from 11th – 17th March 2025.