š Weekly Wrap ā March 24ā28, 2025
Volatility Returns, Sentiment Deteriorates, and Tariffs Take Center Stage
Hey everyone,
It was a rough one; the market got hit with a combination of rising inflation, weakening consumer sentiment, and new trade tensions that reignited volatility and sent major indices lower. If youāve been with me a while, none of this should come as a surpriseāweāve talked about sentiment slipping under the surface for weeks now. Letās break it down day by day, dig into what drove the sell-off.
š Weekly Market Performance
š The Key Drivers This Week
Consumer Sentiment & Confidence Declined Sharply: The Consumer Confidence Index fell for a fourth straight month, and the Expectations Index hit a 12-year low. This signals growing concerns across all demographics about inflation, job stability, and personal finances.
Inflation Stayed Stubborn: The Fedās preferred inflation gaugeāthe Core PCE Price Indexārose 0.4% for February, bringing the annual rate to 2.8%. Thatās hotter than what the Fed wants to see.
Tariffs Are Back on the Table: President Trumpās announcement of a 25% tariff on imported passenger vehicles (effective April 3) added more uncertainty. While he framed it as ālenient,ā the market didnāt love itāespecially tech and automakers.
šļø The Week in Review
š Monday
The week started on a strong note. Stocks rallied as the market held out hope that the new tariffs might be more targeted than originally feared. Tech names, especially the ones that got hit hard earlier this year, bounced back. The S&P 500 climbed above its 200-day moving average, and for a minute, it looked like the bulls were back in charge. Even bond yields moved higherāsigns of some risk appetite returning.
š Tuesday
Another green day, but this one was more about holding ground than breaking out. The S&P pushed a little higher, but under the surface, it was shaky. Consumer confidence dropped againāfour months in a row nowāand the Expectations Index hit its lowest level in over a decade. Thatās not the kind of backdrop that supports long-lasting rallies. Housing data was mixed, and $KB Homes missed earnings, which didnāt help sentiment either.
š Wednesday
That optimism didnāt last. News hit that Trumpās going through with the auto tariffs, and the market rolled over fast. The S&P lost its 200-day moving average again, and the Dow gave back all of its recent gains. There was some early buying, but it dried up quick once the headlines dropped. Even the stronger-than-expected durable goods numbers couldnāt turn things aroundābusiness spending was weak, and that was the real takeaway.
š Thursday
Choppy. Thatās the best word for it. The market couldnāt figure out what to do with the latest round of economic data or the mixed messages on tariffs. Some sectors tried to rally, others gave up early. GDP came in a little better than expected, and jobless claims stayed low, but nothing in the data changed the bigger picture. The weight of this weekās sentiment just kept pressing down.
š Friday
This was the ugly one. Inflation showed up in the PCE reportācore PCE jumped again, and now weāre looking at 2.8% year-over-year. That puts the Fed in a tough spot, and the market knew it. On top of that, consumer sentiment got revised lower, and the decline in expectations was brutal. Thereās no hiding from it anymoreāpeople are worried, and the tape reflected that. Stocks sold off hard into the close, with tech getting hit the worst.
š§ My Take
This week was all about sentimentāand it cracked.
The hard data told one story, but the soft data (confidence, expectations, inflation worries) drove the selloff. The Fedās next move just got a bit more complicated, and markets are responding accordingly. The data looks bad; thatās the reality. But Iāve been doing this a long time, and Iāve seen this beforeāthere are always opportunities if you know where to look.
As always, Iāll continue to track the data, the price action, and the setups. I'm already working on a few high-probability opportunities to share next week. šÆ-EC
If you want daily updates, I post a morning market overview and an evening recap every day on Substack Notes and Xājust follow me and turn on notifications so you donāt miss a thing at: EdwardCoronaUSA
*Disclaimer: The examples in The Options Oracle are my opinion, not financial advice.