Market Wrap | S&P 500 Drops 1.12% Amid Recession Fears and Fed Rate Hints

On March 26, 2025, the S&P 500 index fell by 1.12%, the Dow Jones Industrial Average declined by 0.31%, and the Nasdaq Composite dropped by 2.04%. The market downturn was driven by concerns over a potential U.S. recession, with S&P forecasting a 25% chance of such an event within the next 12 months. Additionally, Federal Reserve officials suggested that interest rates may need to remain higher for longer due to persistent inflation risks and a robust labor market. These factors collectively contributed to the decline in major indices, reflecting investor caution and uncertainty about the economic outlook.

In today's market, the technology sector and the non-essential consumer goods sector underperformed the S&P 500. Conversely, the utilities sector, essential consumer goods sector, energy sector, materials sector, and real estate sector all saw gains despite the overall market conditions.

Today, the U.S. stock market saw significant movements in several key companies. Nvidia shares dropped by 5.74% as investors expressed concerns over potential restrictions on AI chip exports to China due to government actions. Palantir Technologies saw a 4.37% decline, attributed to the U.S. government's plans to cut its defense budget, which impacts Palantir's primary revenue source. Oracle's stock fell by 3.98% due to challenges from declining cloud infrastructure revenue. TSMC's shares dropped by 4.09% following production delays caused by equipment issues, affecting supply chain confidence. Eli Lilly's stock decreased by 3.00% due to patent litigation over its diabetes drug, Mounjaro. Tesla's shares fell by 5.58% amid escalating international trade tensions. Broadcom's stock slid by 4.78% due to tariff concerns. Alphabet's Class C shares dropped by 3.27% and Class A shares by 3.22%, both under scrutiny from the Department of Justice for potential antitrust issues. SAP's stock declined by 4.36% following the discovery of security flaws in its AI Core that could expose customer data.

OSR Holdings surged over 136%, potentially driven by the appointment of a new chief scientific officer, signaling strategic growth potential. Petros Pharmaceuticals rose nearly 134%, with a significant decrease in short interest by 83.3%, indicating bullish sentiment among investors. LogProstyle's IPO was priced lower than expected, leading to a drop of over 52%. Acrivon Therapeutics saw a decline of over 51%, following a lowered price target by HC Wainwright.

The U.S. durable goods orders in March showed a surprising increase of 0.9%, beating the forecasted decline of 1% and indicating stronger economic activity. Meanwhile, the Federal Reserve's Musalem commented that inflation risks have increased, potentially requiring higher interest rates for an extended period, impacting market expectations. Additionally, President Trump is readying an announcement on auto tariffs, which could affect the automobile industry and broader trade relations. Lastly, Tesla shares dropped 3.9% following a five-session rise, ahead of the company's planned release of Q1 production and delivery results.