TheDrop Market Analysis, 03/31/25
Markets made a moderate recovery amid varying sentiments across the market.
The S&P 500 index rose 0.6%, the Dow surged beyond 1%, and the Nasdaq fell by a meager 0.1%. Meanwhile, the Russell 2000 small business index fund underperformed the rest of the market with a 0.6% fall. Clearly, investors bought in several parts of the stock market while evacuating their capital from others. In addition, the value of the USD plummeted against the Euro and other currencies (excluding the yen, which it strengthened against), while gold strengthened.
The market's sentiments could be attributed to a number of factors. First is the pending deadline for the acquisition of TikTok by an American company, which is set to be realized by April 5th. The doctrine was implemented after the initial TikTok ban by the Supreme Court which was very short-lived, but did provoke further interest into a purchase deal with the company. Investors today, fearing that the Trump administration will fail in their ambition to keep the social media platform running by negotiating a very successful purchase deal, sold out in droves, especially from the Nasdaq. By noon, all index funds were bearish, with Big Tech/Magnificent 7 tickers carrying the losses.
Second is dwindling fears about Trump's tariff policies. The climax of investors' and consumers' fears of the economy happened just last week, which resulted in some of the lowest performances for several years according to economic data and stock market trends. However, today seemed to result in some form of easing of fear, possibly due to other news clogging up the minds of investors and consumers alike. Nevertheless, tariffs continue to pose a major risk to the economy, with many of the United States' greatest trading partners producing strong retaliatory responses to the Trump tariffs, including tariffs of their own. Additionally, Goldman Sachs increased the probability of a recession to 35%, while reducing GDP nominal and index fund expectations. This could be dangerous for the economy, and we predict both markets and economic data alike to gradually trend in the negative direction unless significant changes are made.
Apple and Google were the only outliers in the Nasdaq, both rising respectively. Meanwhile, the remainder fell by sometimes large margins; the EV company Tesla fell by 1.7% as it faces heavy competition by its rival company Lucid, which rose by 4.3% today. Palantir, Nvidia, Microsoft, and Oracle all fell as a result of fears of AI spending cuts as companies adapt to higher prices from tariffs.
In a massive surprise, Newsmax, a conservative news company, surged by a whopping 735.1% as it became a publicly traded company. In fact, its CEO even became a billionaire, while the company now obtained another source of capital, investment pools.
