What Happened?

Shares of online home goods retailer Wayfair (NYSE:W) jumped 7.3% in the afternoon session after stocks rebounded to start the session amid continued market volatility and moved slightly higher after the Federal Open Market Committee kept rates at 4.25% to 4.50% in its March 2025 meeting. The Jerome Powell-led committee also hinted at two more rate cuts for the year, saying, "Uncertainty around the economy has grown." 

The good news is that holding rates steady and signaling two additional cuts this year means no surprises (the market dislikes surprises). The bad news is that the Fed reduced its outlook growth to 1.7%, down from the previous projection of 2.1% in December. At the same time, the inflation outlook was raised to a 2.8% annual increase for core prices, up from the prior projection of 2.5%. This suggests the Fed sees the macro tilting towards a stagflation scenario, where inflation rises as economic growth slows.

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What The Market Is Telling Us

Wayfair’s shares are extremely volatile and have had 49 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business. 

The previous big move we wrote about was a day ago when the stock dropped 7.4% after markets seemed to have caught "tariff/trade war fever" once again (Nasdaq down 1.9%, S&P 500 down 1.2%) amid broader geopolitical anxiety.

Wayfair is down 30.7% since the beginning of the year, and at $31.84 per share, it is trading 56.4% below its 52-week high of $72.94 from May 2024. Investors who bought $1,000 worth of Wayfair’s shares 5 years ago would now be looking at an investment worth $1,357.

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