Pulse Check on US Markets
Pulsing Now
Tumbling Pressures
The stock market's recent tumble is largely a reaction to Trump's tariff policies, with investors caught in the crossfire of policy uncertainty. While the Nasdaq has slipped into correction territory and technical pressure remains, the market's next move hinges on two key factors: trade policy clarity and the upcoming inflation report. Based on historical patterns and current conditions, we're likely looking at a modest decline of 2-4% over the next month, though this could shift dramatically depending on mid-March's inflation numbers.
Next Set of Inflation Numbers Matter
If inflation dips below 3% in the upcoming report, we could see a welcome relief rally as Fed rate cut expectations increase. This would particularly benefit tech stocks and the beaten-down Nasdaq, potentially offsetting some tariff concerns. The market seems to be pricing in continued uncertainty, but smart money is already positioning for a potential inflation-driven bounce. Most telling is how defensive sectors have held up relatively well, suggesting investors are repositioning rather than panicking.
The bottom line, Spring Should Bring Better Footing
We're navigating choppy waters, but this isn't 2022 all over again. The underlying economy remains resilient, and the current pullback likely represents a healthy reset rather than the start of a prolonged downturn. Expect continued volatility as headlines swing between tariff threats and inflation data, but barring any major escalation in trade tensions, the market should find its footing by early April. For long-term investors, these periods of uncertainty have historically presented buying opportunities, particularly in quality companies caught in the crossfire of short-term macro concerns.
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By: StratAlign Insights
March 7, 2025, 6:00 am ET