Market Update | March 3rd - March 9th

The What?

The market had a rough time this week. In fact, it was so rough that it was the worst week for the S&P 500 since late last year! Pretty much every sector from financials and technology to real estate and utilities were down over 2%. Continuing with his tariffs, President Trump announced even more tariffs on Mexico, China, and Canada, raising fears of a trade war. Also, the technology sector continued its sell-off, with the granddaddy of tech, Nvidia, falling around 5% over the week.

Now, let's look at the indexes. To start, the S&P 500 dropped 3.1%. The Nasdaq also lost significant value, dropping even more at 3.5%. Finally, the Dow declined about 2.4%. As we can see, every major index ended the week in the red.

Moving on to commodities, the price of gold actually increased by about 1.7%. On the other hand, oil prices fell sharply, falling 3.9% over the week.

I know what you're thinking. "Crypto had to do well, right?" WRONG! Even with the creation of the Crypto Strategic Reserve, the price of Bitcoin fell 14%. XRP took an even worse beating of 26%. Dogecoin reached a 90-day low of 17 cents. Similarly, Solana hit its lowest point in a while at around $130.

The Why?

A couple of key things caused this week's sell-off.

Let's start with the jobs report. In February, investors hoped and expected 160,000 jobs to be added to the U.S. workforce. But, the actual number was a bit lower. Only 151,000 jobs were added last month, far under what investors had expected. As you know from our lesson on Economic Data Reports, what investors expect is extremely important. As if low job creation wasn't enough for the market, the unemployment rate was a disappointment as well. Investors anticipated an unemployment rate of 4%. Instead, unemployment rose to a higher rate of 4.1%. 0.1% may not seem like a lot, but in the realm of the stock market, it is. And even if that wasn't enough, the Fed doubled down on their position to not adjust interest rates, leading to even more market uncertainty. Overall, jobs are in a UNC Basketball-esque slump. Hopefully, they recover, but for now, it's not looking very good.

Then, on Monday, Trump announced even MORE tariffs on China, Mexico, and Canada, causing what some call a "trade war." Each of these countries took the tariffs as a threat and put their own retaliatory tariffs back on the United States. As you know from our trade barrier lesson, tariffs are very bad for the economy in the short term, so they explain a little of why the market dropped so harshly.

Now, let's look at why crypto took a beating this week. On Friday, the United States held the first-ever crypto summit, furthering Trump's agenda of the U.S. becoming the crypto capital of the world. You'd think this would have a positive effect, right? Well... not quite. Crypto investors took the summit as a "sell the news" event. Pretty much every top 25 coin turned red over the course of this week. Another reason why crypto is declining is because some people think the "bull run" is coming to an end. Every four years, crypto enters what investors call the "bull run," which lasts usually five to six months. The bull run started when Trump was elected in early November and is nearing that six-month mark. Every bull run has ended in a terrible crash, so some investors are worried and are trying to get out before the crash.

What's Next?

This upcoming week, we can only hope for some good economic news. If, by some miracle, the Consumer Price Index shows anything positive, maybe the market will start to recover. We should probably expect a rather negative week ahead with Trump's tariffs and him doubling and tripling down on them.

---

Comment if you want the market to recover!