Wall Street Wednesday: Rates, Risks, and Rebounds

Fresh news and strategies for traders. SPY Trader episode #1031. Hey there, Spy Traders! It's your pal, Penny Pincher, back at it again. It's 12 pm on Wednesday, March 19th, 2025, Pacific time, and the markets are doing their thing. Let's dive right into what's shaking up Wall Street today. So, here's the lowdown. The U.S. stock market is generally up today, with the S&P 500 up around 0.8%, the Dow up about 0.6%, and the Nasdaq climbing around 1%. But don't let that fool you, folks. We've seen some serious swings lately, and the S&P 500 even dipped into correction territory recently. Sectorwise, things are a bit mixed. Defensive and cyclical sectors have been outperforming tech and growth stocks. Value stocks are beating growth stocks. Energy's up almost 7% YTD, while tech is down about 7%. Consumer discretionary is really hurting, down nearly 12% year to date. Consumer Staples are up a tiny bit YTD. Now, onto the news. All eyes are on the Federal Reserve. Everyone's waiting to hear what they'll do with interest rates. The word is they'll likely hold steady this time around, but they're also expected to release updated forecasts for rates, the economy, and inflation. The Fed's walking a tightrope here, trying to keep inflation in check without slamming the brakes on economic growth. The Fed held its key interest rate unchanged and signaled it still expects to cut rates twice this year. The Fed also expects the economy to grow more slowly this year and next and expects the unemployment rate to tick higher, to 4.4 per cent. Policymakers also expect inflation will pick up slightly by the end of this year, to 2.7 per cent from its current level of 2.5 per cent. And you know who's making waves? Good ol' President Trump, with his trade policies. Tariffs on imports from Mexico and Canada are scheduled to kick in on April 2nd, and economists are worried this could lead to stagflation. Companywise, Tesla's stock is struggling, probably because of Elon's shenanigans and increased competition. Alphabet, that's Google, is buying cybersecurity firm Wiz for a cool $32 billion. General Mills' stock actually fell despite a strong earnings report, go figure! Nvidia is helping support the market today after rising almost 2%. On the macro front, there are signs the U.S. economy is slowing down. GDP growth for the first quarter of 2025 is expected to be lower. Consumer spending seems to be weakening, and businesses are slowing down their activity. Overall economic policy uncertainty is high. Here's a joke for you, 'Why was the stockbroker a good musician? He had excellent timing with his notes.' So, what's a savvy investor to do? First, diversify, diversify, diversify! Given all this volatility, it's key. Think about value stocks and sectors that do well in a cyclical recovery, if that happens. Manage your risk with structured strategies. Keep a close eye on the Fed's announcements. And stay informed about trade policies, economic data, and companyspecific news. I'd also say, consider buying the dip in quality AI stocks, they could be a bargain right now. Be cautious with tech and consumer discretionary sectors, they're facing some headwinds. And don't forget about defensive sectors like healthcare and consumer staples, they tend to be more resilient during economic downturns. That's all for today, Spy Traders! Remember, I'm just a friendly financial analyst, not a fortune teller. Do your own research, and consult with a qualified financial advisor before making any big moves. Happy trading!