From Yahoo Finance: 2025-04-03 06:49:00

In the first quarter of 2025, the U.S. stock market saw a dramatic shift in leadership, with growth sectors and leading indices swinging to negative. Factors include sector rotation, AI profit-taking, and uncertainty from new administration policies. GDP forecasts have been slashed, with consumer spending driving growth but facing inflation concerns.

The U.S. economy wrapped 2024 with high-2% growth, but fourth-quarter GDP growth declined. Consumer spending remains a major driver, with durable goods growth slowing in 2024. Tariff uncertainty and cautious consumer spending are impacting GDP outlook for 2025. Industrial production and capacity utilization showed mixed results.

Small business and consumer sentiment are weakening due to concerns over tariffs and inflation. Jobs and wages are growing at a slower pace in 2025. Retail sales and personal incomes are showing signs of weakness. The Fed is monitoring economic strains and inflation, with forecasts for rate cuts and economic growth in 2025.

Inflation remains a concern, with CPI and PCE price indexes showing mixed results in 2025. Bond yields have fluctuated, with expectations for lower short-term yields. Earnings from continuing operations showed strong growth in the fourth quarter of 2024, with financial and communication services sectors leading. Energy sector saw a decline in EPS.

Market performance in the first quarter of 2025 saw a shift in leadership towards blue chips, with the Dow Jones leading among major indices. Bond returns have been stable, but fiscal policy could impact markets in 2025. Expectations for 2025 and 2026 include sustained growth in sectors like technology, healthcare, and consumer discretionary.

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