US Stocks Rebound, Led by Large Caps, in Another Volatile Week

Mixed earnings reports contributed to the week’s market volatility.

Traders work on the floor of the New York Stock Exchange in New York City on March 19, 2025. Angela Weiss/AFP via Getty Images

U.S. stocks snapped a four-week losing streak to end the week higher. Despite continued volatility, all major averages posted moderate weekly gains. Large-cap stocks led the rebound, driven by developments related to economic conditions, the Federal Reserve’s policy decisions, and corporate earnings reports.

The S&P 500 ended March 21 at 5,667, up by 0.51 percent for the week; the Dow Jones Industrial Average fared better, up by 1.2 percent to close at 41,985; the Nasdaq ended the week at 17,784, up by 0.17 percent; and the small-cap Russell 2000 was up by 0.63 percent to finish at 2,056.

Large-cap stocks led the list of winners in the market turnaround.

Large-cap stocks refer to the stocks of large, well-established companies with a market capitalization of $10 billion or more, typically included in the Dow Jones and the S&P 500 equity indexes. They are generally less risky than mid- and small-cap stocks and tend to perform better during turbulent times. For instance, Boeing, a Dow Jones component, gained 10 percent for the week on news that it had secured a major Air Force contract. UnitedHealthcare and JPMorgan, two other Dow members, gained 5.77 percent and 3.95 percent, respectively.

Trade during the week was volatile, influenced by economic headlines.

One key update was the February retail sales report, released on the morning of March 17, which showed a recovery from a downwardly revised decline in January, although it fell short of market expectations. The weaker-than-expected sales data contributed to a decline in bond yields, providing support to equities and helping to push the day’s trade higher.

Shares pulled back on March 18, led by a nearly 2 percent decline in the Nasdaq, as the kickoff of Nvidia’s week-long conference failed to impress tech investors.

The situation changed on the afternoon of March 19, following the Federal Open Market Committee’s decision to leave its policy interest rate—the federal funds rate—unchanged.

This did not make headline news for Wall Street, as the decision had been widely anticipated by market participants and, therefore, dovetailed with their expectations.

What was unexpected was Federal Reserve Chairman Jerome Powell’s statement during the news conference following the meeting that any shortfall from Washington’s proposed tariffs would be “transitory.” In addition, the Federal Open Market Committee reiterated its intention to cut interest rates twice this year.

“Jerome Powell’s press conference was the steady hand that the markets needed right now and is helping the market find its footing,” Clark Bellin, president and chief investment officer of Bellwether Wealth, told The Epoch Times.

“Even though Powell acknowledged that tariffs can add to inflation and might take longer for the Fed to meet its inflation target, the market appreciated his clarity and confirmation that economic conditions remain solid, despite the recent volatility.”

These reassuring words from the nation’s central banker triggered a relief rally in both debt and equity markets on the afternoon of that day, with the S&P 500 and Nasdaq rebounding by more than 1 percent.

The choppiness in trade returned on March 20, prompted by another economic headline from the Conference Board, which showed that the Index of Leading Economic Indicators (LEI)—an early signal of turning points in future economic activity—declined again in February, reigniting fears of an impending economic slowdown.

“The U.S. LEI fell again in February and continues to point to headwinds ahead,” Justyna Zabinska-La Monica, senior manager of business cycle indicators at The Conference Board, said in a statement.

“Consumers’ expectations of future business conditions turned more pessimistic. That component weighed down most heavily on the Index in February. Manufacturing new orders, which improved in January, retreated and were the second largest negative contributor to the Index’s monthly decline.

“On a positive note, the LEI’s six-month and annual growth rates, while still negative, have remained on an upward trend since the end of 2023, suggesting that headwinds in the economy as of February may have moderated compared to last year.”

Zabinska-La Monica said that the Conference Board predicted U.S. real GDP growth would slow to about 2 percent this year, citing “substantial policy uncertainty” and a “notable pullback” in consumer sentiment and spending year to date.

The choppy trade extended into March 21, with a sharp turnaround five minutes before the closing bell that helped push the equity averages higher for the week.

Mixed earnings reports also contributed to the week’s market volatility.

On the positive side, Darden Restaurants, a member of the S&P 500 Index, provided an optimistic sales and earnings outlook, with its stock gaining 7.5 percent for the week. Other consumer discretionary stocks also rose, with McDonald’s increasing by 1.87 percent for the week.

On the negative side, Nike and FedEx lost 5.19 percent and 4.90 percent for the week, respectively, because of disappointing sales outlooks for the rest of fiscal year 2025. Similarly, Deckers Outdoor and Under Armour lost 0.69 percent and 1.93 percent for the week, respectively.

Looking ahead, Bellin is optimistic about U.S. large-cap equities.

“There is still plenty of cash sitting on the sidelines and plenty of buying opportunities across the markets, particularly in big cap tech, which was hit hard during this market correction,” he said.

“With the Fed meeting behind us, the next market catalyst will be policy headlines out of Washington, along with the Fed’s preferred inflation measure, [personal consumption expenditures], which is released at the end of this month.”