U.S. Stocks Slide Amid Trade Tensions and Fed Rate Holds

On March 20, 2025, the U.S. stock market saw the S&P 500 index fall by 0.22%, the Dow Jones Industrial Average decline by 0.03%, and the Nasdaq Composite drop by 0.33%. This market downturn coincided with significant macroeconomic developments. European Central Bank (ECB) President Christine Lagarde cautioned that escalating trade tensions between the U.S. and Europe could severely impact the eurozone economy, potentially leading to economic contraction and prolonged uncertainty. Meanwhile, the Federal Reserve maintained the federal funds rate between 4.25% and 4.5%, reflecting a cautious monetary policy stance amid economic pressures from tariffs and high interest rates, which could impact growth and inflation expectations in the U.S. economy.

Based on the current market performance, the technology, materials, industrial, and consumer goods sectors underperformed the S&P 500. Conversely, the utilities, healthcare, energy, and financial sectors experienced gains despite the overall market trend.

IBM shares dropped 3.56% on Thursday, following a warning from tech consulting rival Accenture about slowing U.S. tech spending. This news weighed heavily on IBM's stock, as investors grew concerned about the potential impact on the company's future earnings. Alibaba Group's stock fell 4.39% despite maintaining high profitability. The decline in gross margin, however, raised concerns among investors about the company's financial health.

Impact BioMedical's stock surged over 292%, driven by a new partnership with a leading pharmaceutical company. Plus Therapeutics saw a significant rise of 170%, following the FDA's acceptance of its proprietary drug name, marking a crucial step towards a marketing application. Elevation Oncology's stock dropped 41.82% as the company discontinued the development of its cancer drug EO-3021. Benson Hill's stock fell 40.50% after the company filed for Chapter 11 bankruptcy due to financial constraints and industry challenges.

FedEx has revised its fiscal year 2025 earnings per share forecast downward to $18-$18.60 due to business optimization and spinoff costs, contributing to a 4% drop in its stock. Additionally, the company projects a $400 million impact from international export yield pressure and anticipates inflationary pressures on its cost base to exceed initial estimates. Nike reported third-quarter revenue of $11.27 billion, surpassing estimates, but its CFO forecasts a double-digit decline in digital traffic by fiscal year 2026. The U.S. Treasury auctioned eight-week bills at a 4.215% rate, indicating ongoing demand for short-term government debt amidst macroeconomic uncertainties.