From Nasdaq: 2025-04-01 15:30:00

The S&P 500 saw its worst quarterly performance since Q3 2022 due to economic, geopolitical, and market uncertainties. Corporate EPS is forecasted to grow by 11.5% in CY 2025, with 8 of 11 large cap sectors positive YTD. Despite this, HY Credit and UST rates do not reflect economic contraction, with the Federal Reserve projecting lower real rates.

The first quarter of 2025 brought significant turbulence to the U.S. economy, with slowing data, rising global tensions, and market corrections. Following strong returns in previous years, the S&P 500 corrected over 10% in Q1, its worst performance since 2022. Major indices have all corrected at least 10% from recent highs.

Most stocks outside large-cap growth began correcting in December, with 8 of 11 large-cap sectors seeing declines. However, by the end of Q1, 8 of 11 sectors are positive YTD. International economies are rebounding, with China and Europe implementing stimulus measures. U.S. economic data shows signs of cooling in 2025, with concerns about a slowdown in residential construction.

The Federal Reserve paused its rate cutting cycle, projecting lower growth and higher inflation for 2025. Corporate earnings expectations have declined, with projected earnings growth at 11.5% for CY 2025. The administration’s tariffs on imports have added to market uncertainties. Despite this, global equity markets show signs of improvement, with UST yields suggesting no fear of recession.

This information is provided for educational purposes only. Nasdaq believes the information to be accurate, but advises seeking advice from a securities professional.



Read more at Nasdaq:: First Quarter 2025 Review & Outlook