March saw resolute market behavior. They made impressive advances last month despite a series of crises. The S&P gained 1.44%, the Dow gained 1.26%, and the Nasdaq Composite gained 1.74% on Friday.
The Nasdaq gained 6.69%, the Dow 1.89%, and the S&P 3.51% in March. The quarter was even better for the S&P and Nasdaq: The S&P increased by 7.03%, and the Nasdaq soared by 16.77%, marking the greatest quarter since 2020.
Increase in Oil Prices
I acknowledge that my initial statement that markets were “defiant”—implying that they were acting in opposition to what would be expected given the economic situation—was a little unfair. Despite the obstacles in March, there were grounds for the markets to rise.
After the month’s consumer price index, excluding food and energy costs, was higher than anticipated, February’s core PCE came in lower than markets had anticipated, providing much-needed relief.
- The Nasdaq gained 6.69%, the Dow 1.89%, and the S&P 3.51% in March.
- Tech stocks stand to gain the most from reduced interest rates.
- Investors are anticipating a repeat of last year’s robust market performance in April.
For those who are concerned about inflation and rising inflation rates, this is encouraging news. That’s more than just excellent news for technology companies; it’s music to their ears.
Because their valuation frequently depends on projected earnings, which are worth less when interest rates are high, tech stocks stand to gain the most from reduced interest rates.
Tech was a large winner in March as a result of investors’ perceptions of technology as a haven from the banking crisis and the possibility of slower interest rate increases. Nvidia has increased by an astounding 87.4% this year, although Tesla‘s 58.8% increase and Meta’s 72.7% increase aren’t bad either.
The prospective performance of a stock, however, is more crucial. Investors are anticipating a repeat of last year’s robust market performance in April. That trend will be tested by both the unexpected increase in oil costs and the March jobs report, which will be released this Friday.
The labor market and the stock market will fight it out until one of them eventually gives in if the number of jobs added continues to be consistently high.
