Tuesday, March 18, 2025

Market activity returned to its selling ways today, as the specter of a new Fed decision tomorrow put investors back in a sour mood. The Dow, off -426 points at its session low, finished the day -260 points, -0.62%. The S&P 500 fell -60 points, -1.07%, while the Nasdaq dropped -304 points, -1.71%. The small-cap Russell 2000 slid -18, -0.89%.

NVIDIA Shares Drop -3.4% on Huang Address

NVIDIA NVDA CEO Jensen Huang gave the keynote speech for the latest GTC conference today, and his company shares wound up being one of the weaker performers on the S&P 500 today, -3.4%. Despite unveiling new Blackwell Ultra chips earmarked for the second-half of 2025 and next-generation Vera Rubin GPUs on the calendar for next year, investors were not compelled to put new money to work in NVIDIA.

We already know short-term demand for chips in a general sense remains challenged, and that NVIDIA’s competition is coming for them, mainly on offering lower price points. Huang, who spoke unscripted during the address, did not offer any upward guidance for his company today, not in earnings, revenues or margins.

The GTU conference continues Wednesday, and NVIDIA shares, while -14% year to date so far, are still up +30% from this time a year ago. The issue may be less to do with NVIDIA specifically and semiconductor companies — even growth stocks more generally — if we start to see signs of an economic downturn in the coming weeks and months.

Fed Meeting Tomorrow, Followed by Press Conference

No one on the planet believes the Federal Open Market Committee (FOMC) is going to move on the current Fed funds rate, which is between +4.25-4.50%, where it’s been since December of last year. Economic prints, in several cases, have gotten more inflationary and off recent lows that were still higher than the Fed’s optimum inflation level of +2%.

Even employment has remained buoyant of late, giving the Fed even less of a reason to consider cutting rates. And even though the Fed likes to talk about its strict data-dependency, it should be interesting to hear Fed Chair Jay Powell address press conference questions pertaining to the austere measures from the present federal government: immigration deportation, federal government job cuts, and most especially imposed tariffs on our closest trading partners.

Productivity Reports Improve Over Estimates

Industrial Production for February came in +1.4% earlier this morning, lower than the downwardly revised +1.9% reported for January, but the third-straight month of positive growth. This follows five-straight months of negative prints on this metric — another sign of the economy ticking along just fine.

Capacity Utilization, the tandem report to Industrial Production, grew to +78.2% from +77.8% expected and +77.7% the prior month. That said, this figure reported today is -1.4% below the average month trailing back more than 50 years. So these numbers, while better than expected, still have some room for improvement.

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