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Back-to-Back Gains as Consumers Stay Strong
After last Friday’s spirited bounce, stocks logged another gain today — marking the first back-to-back advance for the S&P 500 since its February 19th record close.
Level Change 3/17/25 (%)
– – – – – – – – – – – – – – –
+0.9 Dow
+0.3 Nasdaq
+0.6 Nasdaq 100
+0.6 S&P 500
+1.5 S&P 400
+1.1 S&P 600
The bearish narrative still emphasizes tariff hand-wringing, with investors bracing for the April 2nd reciprocal tariff announcement. Policy uncertainty remains the elephant in the room.
Fresh bearish evidence arrived from manufacturing and housing.
The New York Fed’s Empire State manufacturing index fell more than expected this month and by the most since May 2023, as new orders fell sharply and input prices climbed. According to the report, “Optimism about the outlook waned considerably for a second consecutive month.”
On top of that, the NAHB Housing Market Index declined for a second straight month, dropping to 39 — its lowest level since August 2024. It’s a diffusion index, such that a reading below 50 indicates a negative outlook. Builders estimate a typical per-home cost increase from recent tariffs to be $9,200.
But the big news was bullish.
February retail sales rose 0.2% month-over-month. That was below 0.7% consensus, and January was revised lower, but control group sales came in stronger than expected. This metric strips out several volatile categories and factors into the gross domestic product reading for the quarter. It rose a robust 1%, better than 0.4% expected. Bulls say that until the labor market cracks, consumers won’t slow down.
In the tech trenches, Intel’s new CEO plans an AI-focused restructuring and a trimming of middle management. Nvidia takes center stage this week with its GPU Tech Conference, where CEO Jensen Huang is expected to unveil chip updates and an AI strategy adjustment. Google is reportedly working with Taiwanese firm MediaTek to lower the cost of its AI Tensor Processing Units, which could take some of the business from Broadcom.
An incremental day, but note the small-cap uptick. Analysts expect an earnings resurgence later this year. Kiplinger: Russell 2000 earnings -5% in Q1, but +28% in Q2, +39% in Q3, +57% in Q4.
— Jason Kelly
