From the T&Q Desk
Markets are facing a critical inflection point today as geopolitical tensions and central bank policy take center stage. President Trump’s call with Vladimir Putin has raised the prospect of a partial Ukraine ceasefire, though details remain unclear, while Israel’s renewed airstrikes in Gaza signal a potential escalation in the region. Meanwhile, all eyes are on the Federal Reserve, which is expected to keep rates steady, but its updated projections could reshape expectations for rate cuts in 2025. On the economic front, housing starts surged and industrial production came in stronger than expected, but rising import prices suggest inflationary pressures persist. With uncertainty high, today’s Fed statement and Powell’s press conference will be pivotal in determining the market’s next move.
Featured Headlines
Putin Proposes Partial Ceasefire and Geopolitical Negotiations
Russian President Vladimir Putin has offered a partial ceasefire in Ukraine and expressed interest in broader geopolitical discussions with the United States. During a recent call with President Trump, Putin agreed to halt attacks on energy infrastructure and initiate technical talks to ease Black Sea navigation. Both leaders hinted at the possibility of a more comprehensive geopolitical agreement in the future. (Read full story…)
Escalation in Gaza
After a two-month ceasefire, Israel launched airstrikes targeting Hamas leaders in Gaza. The timing of these attacks, during the night when leaders were at home, suggests a strategic move by Israel. This escalation raises concerns about a potential return to full-scale conflict in the region. (Read full story…)
Federal Reserve's Policy Meeting
The Federal Reserve's Federal Open Market Committee (FOMC) began its two-day policy meeting on Tuesday, focusing on their ongoing battle against inflation and evaluating potential changes to monetary policy. A statement with their decisions will be released on Wednesday at 2 p.m. Eastern Time, followed by a press conference with Federal Reserve Chair Jerome Powell at 2:30 p.m. (Read full story…)
NVIDIA's Stock Decline Post-GTC
NVIDIA's stock declined following its GPU Technology Conference (GTC), where the company unveiled its latest AI chips. Despite the advancements, investors were unimpressed, leading to a 3.4% drop in NVIDIA's shares. (Read full story…)
Homebuilders Anticipate Slowdown
Homebuilders are expected to slow down construction efforts, exacerbating America's housing shortage. Factors such as rising material costs and labor shortages contribute to this anticipated slowdown, potentially impacting housing affordability. (Read full story…)
Emerging Market Currencies Under Pressure
Emerging market currencies are experiencing declines, with the selloff spreading from Turkey to other regions. This trend reflects broader concerns about global economic stability and investor risk appetite. (Read full story…)
Previous Trading Day Recap
U.S. stocks slid on Tuesday, giving back Monday’s gains as investors positioned cautiously ahead of today’s Federal Reserve policy decision. The S&P 500 fell 1.1%, the Dow lost 0.6%, and the Nasdaq dropped 1.7%, with large-cap tech stocks leading the decline. Tesla, Alphabet, Amazon, Meta, and Nvidia all extended their 2025 pullback, with Nvidia falling 3.4% following its GTC conference, where product announcements failed to impress Wall Street.
Key Market Drivers
Caution Ahead of the FOMC Decision
Markets are awaiting today’s Federal Reserve policy announcement at 2 p.m. ET, with expectations that the Fed will keep rates steady at 4.25%-4.50%. The bigger focus will be on the Fed’s updated economic projections, particularly whether policymakers adjust their outlook for interest rate cuts given recent economic data.
Economic Data Shows Mixed Signals
Housing starts surged 11.2% in February, far exceeding estimates, signaling resilience in the housing sector. However, housing permits fell 1.2%, suggesting future construction activity may slow.
Import prices rose 0.4%, above expectations, adding to concerns about trade-related inflationary pressures.
Industrial production climbed 0.7%, more than tripling forecasts, with manufacturing output rising 0.9%, reflecting strength in the industrial sector.
The Atlanta Fed’s GDPNow model revised its Q1 GDP estimate higher to -1.8%, an improvement from -2.1% the previous day.
Geopolitical Uncertainty Pressures Sentiment
Markets remain on edge as geopolitical tensions intensify:
Russia proposed a partial ceasefire in Ukraine, but concerns remain over whether this will lead to broader de-escalation.
Israel launched airstrikes on Gaza, marking its first major offensive since the ceasefire began.
President Trump warned Iran over potential escalations in the Middle East.
Treasuries & Commodities
Gold surged to a new record high, rising $34.70 (1.15%) to $3,040.80 per ounce, as investors sought safety ahead of the Fed meeting.
Oil reversed earlier gains, snapping a two-day win streak, as traders weighed geopolitical risks and Chinese demand outlook.
Treasury yields declined, with the 10-year yield falling to 4.27%, as strong demand for a $13B, 20-year bond auction underscored investor uncertainty.
Economic Calendar
March 19, 2025
Federal Reserve Interest Rate Decision: The FOMC will announce its policy decision today, with expectations of maintaining the federal funds rate at its current range of 4.25% to 4.5%. Investors will closely monitor the accompanying statement and Chair Jerome Powell's press conference for insights into future monetary policy direction.
Earnings Calendar for March 19, 2025
Pre-Market Reports
PDD Holdings (PDD) – The Chinese e-commerce giant is set to report Q4 earnings before the market opens. Analysts expect strong revenue growth of $115.04 billion, up significantly from $88.88 billion in the prior quarter, with EPS projected at $19.86, up from $17.32.
General Mills (GIS) – The food giant is expected to post Q3 earnings of $0.98 per share, down from $1.17 last quarter, with revenue projected at $5.02 billion, slightly lower than the previous quarter’s $5.10 billion. Investors will watch for pricing trends and consumer demand.
Williams Sonoma (WSM) – The home goods retailer is set to release Q4 earnings, with expectations of $2.90 per share, a sharp drop from $5.44 last quarter. Revenue is forecast at $2.34 billion, slightly higher than the prior quarter’s $2.28 billion, as the company faces a post-pandemic slowdown in home furnishings.
Post-Market Reports
Five Below (FIVE) – The discount retailer will release Q4 earnings after the market closes, with EPS expected at $3.37, down from $3.65 last quarter. Revenue is projected at $1.38 billion, reflecting solid holiday season sales. Investors will focus on store expansion plans and consumer spending trends.
Guess (GES) – The fashion retailer is set to report Q4 earnings post-market, with EPS forecast at $1.43, down from $2.01 in the prior quarter. Revenue is expected at $920.92 million, slightly higher than $891 million last quarter. Analysts will be looking for insight into global demand and inventory management.
Overnight Markets
Asia:
Nikkei 225: -0.5%
Shanghai Composite: +0.3%
Europe (as of 6:00 AM ET):
FTSE 100: -0.2%
DAX: -0.4%
US Pre-Market (As of 6:30 AM ET, March 19, 2025)
Final Thoughts
Investors are navigating a complex landscape marked by geopolitical tensions, central bank policy decisions, and sector-specific developments. The Federal Reserve's upcoming announcement will be pivotal in shaping market sentiment, especially amid ongoing trade uncertainties and inflationary pressures. Maintaining a diversified portfolio and staying informed are essential strategies in this environment.