Market steps back

Stocks wrapped up a choppy February by pulling back to the lower reaches of what is now a nearly three-month trading range, as tariffs, tech weakness, and continued concerns about the strength of the US consumer brought out the bears last week.

At least until late Friday. In early trading on Friday, the S&P 500 (SPX) initially rallied following a cooler-than-expected inflation reading from the PCE Price Index, but retreated to within 0.2% of its lowest close of the year after a contentious meeting between President Trump and Ukraine President Volodymyr Zelenskyy. But the SPX reversed again to close up more than 1.5% on the day, erasing almost all of Thursday’s sharp sell-off:

The headline: Market goes “risk off.”

The fine print: Last week saw investors bidding up defensive sectors and selling tech, small caps, and consumer discretionary stocks. The SPX was briefly in positive territory for the week early Thursday, but news that the White House planned to move ahead (on March 4) with tariffs on Mexico, Canada, and China, a post-earnings sell-off in NVIDIA (NVDA) shares, and a surprise jump in jobless claims proved to be too much for bulls.

The number: -0.2%, the surprise drop in personal spending reported on Friday—another data point that fit the recent narrative about potentially declining consumer strength.

The scorecard: The Nasdaq 100 (NDX) tech index fell the most last week, while the Dow Jones Industrial Average (DJIA) gained nearly 1%:

Sector returns: The strongest S&P 500 sectors last week were financials (+2.4%), real estate (+2%), and health care (+1.3%). The weakest sectors were tech (-4.9%), communication services (-3.1%), and consumer discretionary (-2.9%).

Stock movers: EverQuote (EVER) +27% to $25.62 on Tuesday, Montrose Environmental Group (MEG) +33% to $23.13 on Thursday. Ibotta (IBTA) -46% to $34.01, Digimarc (DMRC) -43% to $15.39, both on Thursday.

Yields: The 10-year Treasury yield hit new lows for the year, falling 0.19% to 4.23% last week.

Futures: April WTI crude oil (CLJ5) ended another volatile week $0.64 lower at $69.76. Despite hitting a record close last Monday, April gold (GCJ5) pulled back to close Friday at $2,848.50, down $104.70 for the week. Biggest gainers: May lumber (LBSK5) +5.3%, March VIX (VXH5) +3.2%. Biggest decliners: February ether (METG5) -16.1%, February micro bitcoin (MBTG5) -11.7%.

Jobs data highlights the first week of the new month, although traders will be keeping a close eye on tariffs and geopolitical developments:

●Monday: S&P Global Manufacturing PMI, ISM Manufacturing Index, construction spending
●Wednesday: ADP Private Employment, S&P Global Services PMI, ISM Services Index, factory orders, Fed Beige Book, vehicle sales
●Thursday: job cuts, trade balance, productivity and labor costs, wholesale inventories
●Friday: Employment Report

This week’s earnings include:

●Monday: Heidrick & Struggles (HSII), Okta (OKTA)
●Tuesday: AutoZone (AZO), Best Buy (BBY), Target (TGT), AeroVironment (AVAV), Box (BOX), CrowdStrike (CRWD), Nordstrom (JWN), Ross Stores (ROST)
●Wednesday: Abercrombie & Fitch (ANF), Foot Locker (FL), REV Group (REVG), Thor Industries (THO), MongoDB (MDB), Marvell Technology (MRVL), Zscaler (ZS)
●Thursday: BJ’s Wholesale Club (BJ), Burlington Stores (BURL), Cracker Barrel (CBRL), Kroger (KR), Macy's (M), Broadcom (AVGO), Costco (COST), Gap (GAP), Guidewire Software (GWRE), Hewlett Packard Enterprise (HPE)
●Friday: Genesco (GCO), Janux Therapeutics (JANX)

Check the Active Trader Commentary each morning for an updated list of earnings announcements, IPOs, economic reports, and other market events.

March has been a positive month for the SPX in 45 of the past 68 years, and 22 of the past 34. The index’s typical March return over the past three decades has been middle of the road—1.5% overall (fifth-highest among all months), with the median positive March coming in at 3.3% and the median negative March at -2.1%.

Historically, there’s been some consistency in the SPX’s typical trajectory in March. The following chart shows the SPX’s intramonth profiles—its median net return as the month progresses—for two periods, 1957-1990 (blue) and 1991-2024 (orange):¹

For both periods, the SPX’s median return for the entire month was roughly the same (around 1.5%), most of the gains occurred in the first half of the month, and the return tended to level out in the latter. The most notable difference is that the SPX was, on average, weaker and more volatile early in month in the 1991-2024 period.

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¹ All figures reflect S&P 500 (SPX) daily closing prices, 1957-2024. The intramonth profile represents the median percentage price change from the final trading day of February to each of the subsequent 21 trading days. Supporting document available upon request.