S&P 500 falls amid big tech weakness and Fed uncertainty

David Morrison

SENIOR MARKET ANALYST

19 Mar 2025

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US stock indices fell sharply yesterday, giving back around half of the gains made over the previous two sessions. Once again it was Big Tech that led the decline.

There had been high hopes that generative AI chipmaker, NVIDIA, could boost investor confidence as it concluded its GPU Technology Conference. But CEO Jensen Huang was unable to provide the spark needed to ignite a big rally, and the stock sold off in response.

NVIDIA lost around 4% yesterday, contributing to a 1.7% decline in the NASDAQ and a drop of 1.1% in the S&P 500. Tesla and Palantir also contributed to the negative session falling 5.3% and 4% respectively.

Investors were also left nonplussed by reports which followed a phone call between Presidents Trump and Putin concerning the war in Ukraine and its aftermath.

Mr Putin would not agree to a full 30-day ceasefire, but said he would hold back from targeting Ukraine’s energy infrastructure, on the understanding that Ukraine would do likewise. As Russia has already done huge damage to Ukraine’s infrastructure, while Ukraine has only just begun to successfully target Russia’s, this looks like a big win for Putin.

Geopolitical commentators seem divided about the outcome of the call. But it would seem that Vladimir Putin got the best end of the talks, with some analysts insisting that Mr Trump was completely outplayed.

US stock index futures were a touch firmer in early trade this morning, but still a long way below the highs made at the beginning of this week.

S&P 500 daily chart showing a sharp decline from an upward channel.

Source: TN Trader

Investors are now focused on today’s conclusion of the Federal Reserve’s monetary policy meeting. The consensus view is that the Fed will leave rates unchanged. But investors expect to glean clues as to their future moves.

The FOMC will release its quarterly Summary of Economic Projections, giving members’ forecasts for Fed Funds (via the ‘Dot Plot’), inflation, growth and unemployment for this year and beyond. It will also be interesting to hear what Fed Chair Jerome Powell has to say about President Trump’s ongoing tariff programme.

The CME’s FedWatch Tool currently suggests that there could be as many as three 25 basis point rate cuts this year. All the US majors remain oversold according to their daily MACDs, and tonight’s meeting could be significant in setting the future direction of travel.


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