Market Analysis

U.S. stocks experienced a slight decline on Tuesday, relinquishing modest gains toward the end of the session, resulting in the third consecutive drop for the Dow and S&P 500. Investors were eagerly awaiting economic data in a shortened trading week to assess the Federal Reserve's policy direction.

Despite efforts, stocks struggled to gain momentum upwards. Tesla saw a 2.92% increase following CEO Elon Musk's announcement of a one-month trial of its Full Self-Driving technology for both existing and new customers in the U.S. This move contributed to a 4% weekly increase in Tesla's stock, although it remains down over 28% for the year.

Attention remains focused on the upcoming release of the Personal Consumption Expenditures Price Index (PCE), a key inflation indicator favored by the Fed. This data, scheduled for Friday, coincides with the Good Friday holiday when U.S. markets will be closed.

Economists anticipate a 0.4% rise in the PCE for February, with an annual increase of 2.5%. Core inflation, excluding volatile food and energy prices, is projected to have risen by 0.3% last month, maintaining an annual rate of 2.8%.

Stephen Massocca, Senior Vice President at Wedbush Securities, emphasized the significance of Friday's data, suggesting that market movements until then may be regarded as insignificant noise. Any indication from the Fed suggesting a potential increase in interest rates could negatively impact the market sentiment.

On the economic front, there were positive signs as orders for durable goods in the U.S. surpassed expectations for February, while business spending on equipment showed signs of recovery. Consumer confidence, as measured by the Conference Board, remained relatively stable at 104.7 in March.

The Dow Jones Industrial Average dropped by 31.31 points (0.08%) to 39,282.33, while the S&P 500 lost 14.61 points (0.28%) to 5,203.58, and the Nasdaq Composite slid 68.77 points (0.42%) to 16,315.70.

Market sentiment last week was buoyed by the Fed's decision to maintain its projection for three interest-rate cuts this year. Expectations of a rate cut in June have increased, with the CME's FedWatch Tool indicating a 70.4% probability, up from 59.2% the previous week.

Trump Media & Technology group saw a significant 16.1% increase, closing at $57.99 after trading as high as $79.38 on its first day following a reverse merger with a blank check firm.

McCormick surged 10.52% as the top performer on the S&P 500 after surpassing market expectations for first-quarter sales and profit.

Seagate Technology climbed 7.38% after receiving an upgrade from Morgan Stanley, shifting its rating from "equal-weight" to "overweight."

However, United Parcel Service shares tumbled 8.16% after announcing its 2026 forecast.

Declining stocks outnumbered advancers by a ratio of 1.24-to-1 on the NYSE and about 1.34-to-1 on the Nasdaq.

The S&P 500 recorded 33 new 52-week highs and one new low, while the Nasdaq witnessed 122 new highs and 124 new lows.

Trading volume on U.S. exchanges totaled 10.43 billion shares, below the 12.23 billion average for the full session over the past 20 trading days.

Trading activity is expected to remain light throughout the week, thinning out further as the holiday approaches.

Paraphrasing text from "Investing" all rights reserved by the original author.