Sharp reversal in US marketsAmid market volatility and uncertainty, US stock indices experienced a sharp decline last week. The Dow Jones Index (#DJI30) fell by 3.5%, the S&P 500 (#SP500) dropped by 4.1%, and the Nasdaq-100 (#NQ100) lost 5.5%.
Investors reacted nervously to new economic data, including rising inflation and expectations of interest rate hikes, leading to a sell-off in stocks and a decline in key indices. The drop was particularly significant in the technology and consumer sectors, where companies like Apple and Tesla lost around 6-7% of their value.
However, starting March 13, 2025, the indices began to recover: #DJI30 gained 2.3%, #SP500 rose by 2.5%, and #NQ100 increased by 3.1%.
The recent rebound in US stock indices has been driven by several factors that restored investor confidence. Let’s take a closer look at the main reasons:
• Improvement in unemployment data: Labor market statistics played a crucial role in the market recovery. The US unemployment rate fell to 3.4% in February 2025, marking a record low in recent decades. This indicates strong employment levels and economic resilience, boosting investor optimism and supporting stock market growth.
• Stabilization of inflation and interest rate expectations: Although inflation in the US remains high, recent data showed a slowdown in its growth. Reduced inflationary pressure gave investors hope that the Federal Reserve (Fed) might slow down the pace of interest rate hikes. This was perceived as a sign of potential economic stabilization, positively impacting stock indices.
• Growth in consumer spending: One of the key drivers of the recent market recovery has been the increase in consumer spending. In Q1 2025, consumer demand in the US showed strong performance, serving as an essential indicator of economic activity. Increased spending on goods and services supports business stability and enhances corporate revenues, which, in turn, stimulates stock growth.
• Absence of new geopolitical risks: In recent weeks, there have been no major geopolitical crises or new threats on the international stage. This helped financial markets stabilize, as investors could focus on economic data and corporate earnings reports, contributing to stock index growth.
• Positive corporate earnings reports:
• #Microsoft (MSFT): Microsoft shares rose by 4.2% after reporting strong quarterly results, driven by growth in cloud services and software revenue.
• #Google (GOOGL): Alphabet’s stock increased by 3.7% due to higher advertising revenue and improved forecasts for upcoming quarters.
• #Apple (AAPL): Apple shares climbed 2.9%, supported by strong sales of new products and rising revenue from services.
• #Tesla (TSLA): Tesla stock surged 5.6%, fueled by strong electric vehicle sales growth and optimistic profit projections for the next quarter.
These companies demonstrated significant growth on the back of improved financial performance, strengthening investor confidence and aiding the stock market’s recovery amid volatility.
So despite last week’s market downturn, the current situation in the US stock market signals a potential recovery and a more positive trend in the coming weeks.
