Weekly market report: March 12, 2025

Weekly market report: March 12, 2025

USA

The US market showed resilience during the week of 3rd March to 9th March 2025 despite persistent inflation and mixed economic data. Inflation rose slightly to 3.1% YoY in February, higher than the anticipated 2.9%, with core inflation at 3.4%, reflecting ongoing price pressures in the service and energy sectors. Revised Q4 2024 GDP data showed the US economy growing at an annualized rate of 2.4%, supported by strong consumer spending and increased government investment. The labor market remained solid, with weekly initial jobless claims dropping to 197,000, signaling tight labor conditions. Manufacturing PMI softened to 49.7, indicating a mild contraction in manufacturing activity, while the Services PMI remained strong at 54.2. The S&P 500 gained 1.2% during the week, driven by strength in technology and consumer discretionary stocks, while the Nasdaq outperformed with a 2.1% gain, supported by AI and semiconductor stocks. The Dow Jones Industrial Average (DJIA), however, slipped 0.5% due to pressure on industrial and financial stocks.

Europe

European markets faced mixed economic signals as inflation remained elevated and growth stalled. Eurozone inflation slowed to 2.6% in February from 2.8% in January, but core inflation stayed elevated at 2.9%, prompting the European Central Bank (ECB) to adopt a cautious tone regarding rate cuts. Preliminary Q1 2025 GDP data showed flat growth at 0.0%, reflecting stagnant economic activity amid weak industrial production and cautious consumer spending. The Eurozone composite PMI improved slightly to 50.5, signaling a return to modest expansion. The STOXX Europe 600 Index rose 0.8%, led by gains in luxury and energy stocks, while the FTSE 100 added 0.5% on strength in mining and oil stocks. However, Germany’s DAX 40 fell 0.3% due to weakness in auto and manufacturing stocks, while France’s CAC 40 slipped 0.2% due to political uncertainty and weak domestic demand. Spain’s IBEX 35 rose 0.7% on strong bank earnings and a rebound in consumer activity.

Japan

Japan's market struggled as the economy showed signs of contraction and weakening global demand. Inflation slowed to 2.2% in February from 2.5% in January, driven by declining energy costs and easing supply chain disruptions. Q4 2024 GDP data confirmed a contraction of -0.4%, putting Japan into a technical recession. The labor market remained stable, with the unemployment rate holding at 2.8%, but wage growth remained sluggish despite government incentives. The Manufacturing PMI dropped to 48.5, indicating contraction in factory activity, while the Services PMI rose to 53.3, supported by domestic demand. The Nikkei 225 Index fell 1.4% during the week, pressured by weakness in export-dependent sectors, while the TOPIX Index dropped 1.2%, reflecting broad-based selling in industrials and financials. Geopolitical tensions with China over disputed maritime territories further weighed on market sentiment.

China

China’s market showed signs of stabilization, supported by government stimulus and improving economic indicators. February inflation remained subdued at 0.6% YoY, reflecting weak domestic demand despite a recovery in manufacturing activity. GDP growth for Q1 2025 is projected at 4.8%, supported by increased infrastructure investment and government spending. The labor market remained under pressure, with the urban unemployment rate steady at 5.1%, but youth unemployment remained elevated at 15.6%. Manufacturing PMI improved to 50.2, indicating a slight expansion in factory output, while Services PMI remained robust at 54.1, signaling strength in domestic consumption and tourism. The Shanghai Composite Index rose 0.9% during the week, supported by gains in infrastructure and consumer stocks, while the Hang Seng Index gained 1.7% on strength in technology and financials. However, ongoing trade tensions with the US and geopolitical uncertainty over Taiwan kept investor sentiment cautious.

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