Stocks pulled back on Tuesday as a sell-off that has engulfed Wall Street in recent weeks resumed after two straight winning sessions. The Dow Jones Industrial Average lost 260.32 points, or 0.62%, closing at 41,581.31. The S&P 500 shed 1.07%, ending at 5,614.66.
The Nasdaq Composite dropped 1.71% and settled at 17,504.12. Shares of Tesla, one of the stocks hardest hit during the market’s recent correction, were down yet again. The stock fell more than 5% after RBC Capital Markets downgraded it, citing rising competition in the EV space.
#MarketAlert | US: S&P 500 snaps 4-week losing streak, Dow Jones up 0.1%, Nasdaq up 0.5%#UnitedStates #DowJones #Nasdaq pic.twitter.com/t7G8TmAMZp
— ET NOW (@ETNOWlive) March 22, 2025
Other tech names also saw declines, with shares of Apple and Microsoft dropping nearly 4% and more than 3%, respectively. “It does appear the market really does want to rotate into things that haven’t worked as well and out of things that did work well for the last couple of years, so that may be just what all this is about,” said Rhys Williams, chief investment officer at Wayve Capital. The declines follow a volatile period on Wall Street, exacerbated by soft economic data and fluctuating trade policies from the White House.
The S&P 500 entered correction territory last week but made up some ground in the recovery rally seen in Friday’s and Monday’s sessions. Despite the recent bounce, the tech-heavy Nasdaq remains in a bear market. While investors continue to follow updates out of the White House, they’ll turn their attention to the Federal Reserve’s two-day policy meeting that kicked off Tuesday.
Recent spike in 6-month capex expectations was quite short-lived per @philadelphiafed Manufacturing Index … confidence has receded sharply over past few months pic.twitter.com/P11PYBWPK7
— Liz Ann Sonders (@LizAnnSonders) March 21, 2025
Traders will closely follow Wednesday afternoon’s interest rate announcement and subsequent press conference with Fed Chair Jerome Powell. Fed funds futures are pricing in a strong likelihood that the central bank holds rates steady.
According to Ross Mayfield, an investment strategist at Baird, stocks could see more pullback from current trading levels. “Your average non-recession pullback or correction is in the 15% range, which is not all that different from what the average intra-year drawdown is over the last 40 or 50 years anyway, so would I be surprised at all if we reenter correction territory and press toward 14% or 15%? Not at all,” he said.
From the @WSJ article, “Investors Who Were All In on U.S. Stocks Are Starting to Look Elsewhere.”#markets #economy #stocks #investing #investors pic.twitter.com/Ay6x10oWM2
— Mohamed A. El-Erian (@elerianm) March 23, 2025
Market braces for continued volatility
Janney Montgomery Scott echoed a similar sentiment, advising investors to remain cautious. “We believe there may be more upside for stocks on a short-term basis, as the major benchmarks we track have yet to make key Fibonacci retracements on their charts,” wrote Dan Wantrobski, the firm’s associate director of research, in a recent note to clients. “We remain cautious moving through the March – April time frame and believe another leg lower can materialize in the coming days/weeks.”
Wolfe Research also weighed in, predicting further volatility likely through May.
“We don’t believe the market has bottomed yet, as we expect further choppy inflation and employment data over the next few months,” said Chris Senyek, chief investment strategist at Wolfe Research. Additionally, with investors feeling significant ‘tariff fatigue,’ we expect policy uncertainty to linger until May.
MicroStrategy, now known as Strategy, announced plans to raise about $500 million in offering a new class of preferred stock known as perpetual Strife to fund more of its bitcoin purchases. The shares will accrue a 10% annual dividend rate payable quarterly in cash beginning June 30.
As Wall Street grapples with recent sell-offs and anticipates key economic decisions, investors are advised to brace for continued volatility. The Fed’s next steps and ongoing updates from the White House will be critical in determining the market’s direction in the coming weeks.
Image Credits: Photo by Joshua Mayo on Unsplash
