"r-word" Fears Send Stock Market Much Lower

Monday, March 10, 2025

As bad as the last few weeks of trading have been, today was worse. We had been grappling with shifting tariff plans on the biggest U.S. trading partners and feeling a ceiling at or near all-time highs, but today we’ve ratcheted up the wall of worry to possible recession (the “r-word”) and stagflation. The Dow lost -890 points today, -2.08%, the S&P 500 -155, -2.70%, the Nasdaq -727, -4.00%, and the small-cap Russell 2000 -50 points, -2.41%.

Also, we saw the Volatility Index (VIX), which had been historical calm until a couple weeks ago, rose to its highest level since back in August: a tad above one standard deviation from the norm. We’re also seeing short-term options trading higher than longer-term, an inversion known as “backwardation.”

The cyclical trade has moved overseas for now: Europe and Asia. U.S. stocks had led the way for a long time, but now the growth is in places like Germany and Taiwan. Have U.S. markets entered oversold territory? While the tech-heavy Nasdaq and small-cap Russell 2000 are both -11% over the past month, the Dow is down “only” half that over the same time period. 
 

Stock Performance Roundup: The Good, the Bad and the Ugly

Consumer Staples stocks, conversely, are doing quite well. Kimberly-Clark KMB shares are +12% over the past month. Redfin RDFN shares are up huge — +69%! — on the purchase announcement by Rocket Companies RKT for $1.75 billion in all stock. RKT stock is down -15% on the news. 

Tesla TSLA is also down another -15% today — its worst trading day since 2020, while Wall Street banks Morgan Stanley MS and Wells Fargo WFC are both down -7% today, on perceived lending delays and a lower yield curve possibly slimming future gains. Apple AAPL posted its biggest single-session selloff in 2 1/2 years: -4.8%.
 

Oracle Posts 3rd Earnings Miss in 4 Quarters

Enterprise software giant Oracle ORCL posted fiscal Q3 earnings results today after the close, missing bottom-line estimates by a penny to $1.47 per share, on $14.1 billion in revenues which missed the Zacks consensus for $14.36 billion. Cloud Infrastructure missed expectations slightly, to a still-strong +49%. Founder Larry Ellison expects its Data Center space to double in 2025. The company will talk guidance on the upcoming earnings call; shares are +1.5% in late trading, even after missing.

Check out the updated Zacks Earnings Calendar here.
 

What to Expect from the Stock Market Tuesday

Back in early January, the question was whether markets had the gumption to push through new all-time highs. Now we ask quite a different question: have market indexes pulled back far enough? Small-business optimism in the NFIB Index tomorrow morning expects further erosion to around 101 for February. Meanwhile, JOLTS data for January look to remain steady at 7.6 million job openings for the month.

CPI and PPI data will help determine the health of the economy. Positive surprises for February prints on Wednesday and Thursday may give market participants context that the trading environment is stronger than currently being represented, much the way Fed Chair Jerome Powell’s speech in New York bolstered markets somewhat on Friday.

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