Daily Market Review
Date:
21.3.25
Closing Recap:
U.S. stocks experienced a broad and significant sell-off across all major indices, with the Dow Jones Industrial Average shedding over 700 points. The decline was attributed to a confluence of factors including weakness in key sectors, concerns about a potential new coronavirus, and disappointing economic data rather than a single catalyst, triggering a flight to safety. Bitcoin prices also slid, and the US dollar strengthened against major currencies.
Key Takeaways:
- All major U.S. indices saw substantial declines, with the Nasdaq and Russell 2000 suffering the largest percentage drops.
- A “flight to safety” was evident as gold prices rose after an initial dip and Treasury yields declined as bond prices advanced. Bitcoin prices, however, erased earlier gains and slid notably.
- Weakness was seen in the semiconductor sector, transportation stocks, and AI-related data center names.
- A report concerning a potentially pandemic-capable coronavirus in China exacerbated the afternoon sell-off.
- Disappointing economic data, including weaker-than-expected PMI, existing home sales, and consumer sentiment, contributed to the negative sentiment.
- The US dollar strengthened, reflecting the risk-off mood.
Market Overview:
U.S. equity markets witnessed a day of widespread selling pressure, reversing some of the gains seen earlier in the week when the S&P 500 reached record highs. The Dow Jones Industrial Average bore the brunt of the losses in terms of points, while the technology-heavy Nasdaq and small-cap Russell 2000 experienced the largest percentage declines. The sell-off appeared to be driven by a combination of emerging concerns rather than one specific trigger.
Adding to the negative backdrop, the day’s economic data releases fell short of expectations. The risk-off environment also led to a strengthening of the US dollar against major currencies like the Euro and the Japanese Yen. Bitcoin, often seen as a risk asset, mirrored the equity market’s decline, erasing earlier gains.
| Index | Up/Down | % | Last |
| DJ Industrials | -11.31 | 0.0003 | 41953 |
| S&P 500 | -12.4 | 0.0022 | 5662 |
| Nasdaq | -59.16 | 0.0033 | 17691 |
| Russell 2000 | -13.45 | 0.0065 | 2068 |
Economic Data:
The economic data released on Friday presented a uniformly weak picture:
- S&P Global Flash PMIs: The U.S. S&P Global February flash composite PMI fell to 50.4 (vs 52.7 in January). The services PMI contracted for the first time in roughly two years, dropping to 49.7 (vs 52.9). The manufacturing PMI slowed to 51.6 (vs 51.2). These figures indicate a potential slowdown in economic activity, particularly in the services sector.
- Existing Home Sales: January Existing Home Sales disappointed, falling by 4.9% to an annualized rate of 4.08 million units (consensus 4.12M), down from December’s 4.29M. Inventory of homes for sale stood at 1.18 million units, representing 3.5 months’ worth, and the median home price rose by 4.8% year-over-year to $396,900. The decline in sales suggests ongoing headwinds in the housing market.
- University of Michigan Consumer Sentiment: The final February reading for the University of Michigan consumer sentiment index came in at 64.7, below both the consensus of 67.8 and January’s final reading of 71.1. The current conditions and expectations indices also weakened. Notably, the 1-year inflation outlook rose to 4.3% (from 3.3% in January), and the 5-year inflation outlook increased to 3.5% (from 3.2%), indicating rising concerns about future price pressures among consumers.
The consistently negative economic data amplified the risk-off sentiment already present in the market due to other factors.
Commodities, Currencies, and Treasuries:
In the commodities market, oil prices experienced a significant decline, with WTI crude futures settling at $70.40 per barrel (-2.87%) and Brent crude at $74.43 per barrel (-2.68%). Natural gas futures climbed by approximately 2%. Gold prices initially dipped but then reversed to finish slightly lower at $2,953.20, still marking a weekly gain. The US dollar strengthened against the Euro (EUR/USD at 1.0458) and the Japanese Yen (JPY/USD at 149.15), reflecting increased demand for safe-haven assets. Bitcoin prices erased earlier gains, sliding by 2.87% to around $95,000. The Treasury market saw a “flight to safety,” with the 10-year Treasury yield dropping by 8 basis points to 4.419%, and the 2-year yield falling by 7.2 basis points to 4.192%.
| Asset | Up/Down | Last |
| WTI Crude | 1.1 | 68.26 |
| Brent | 1.22 | 72 |
| Gold | 2.6 | 3043.8 |
| EUR/USD | -0.0058 | 1.0843 |
| JPY/USD | 0.1 | 148.78 |
| 10-Year Note | -0.017 | 0.04239 |
Looking Ahead:
Next week promises to be busy with the peak of the earnings season and crucial economic data releases, including PCE inflation and GDP figures. Investors will be closely monitoring these events for further insights into corporate performance and the overall health of the economy. Any updates regarding the potential new coronavirus and global risk sentiment will also play a significant role in market direction. The performance of the US dollar and the reaction in the Treasury and Bitcoin markets will continue to provide signals about investor risk appetite.