March Market
As we head into March 2025, it’s important to get a macro-level overview of the stock market before investing in large indexes or individual stocks. My favorite way to do this is by analyzing three of the biggest conglomerations of stocks in the market: the S&P 500, the NASDAQ 100, and the Dow Jones Industrial Average (DJIA) as well as notable international indexes. Understanding these three indexes will help us understand the mindset of investors and how the general economy has done in previous periods.
The Domestic Indexes
In 2024, the S&P 500 performed the best out of the three indexes, delivering an average annual return of 26.4% during the period. This massive growth reflects high levels of confidence for investors heading into 2025, pushing the index to an all-time high of $6,152.87 in February of 2025.
The NASDAQ 100 wasn’t far behind, however, with a huge average annual return of 26.0% in 2024. The index rising substantially illuminates underlying consumer confidence and investor sentiment that drives future price levels even higher, as the index reached its highest point in February 2025 with a price of $22,139.43.
Lastly, the DJIA, Dow Jones Industrial Average (an index that tracks 30 large, publicly traded companies in various fields listed on U.S. stock exchanges) returned 18% in 2024. While not at the same level as the other indexes, having all three grow at such rapid rates demonstrates how strong the economy is right now, despite any geopolitical, social, and technological changes occurring in the broader economy.
International Indexes
The FTSE 100 (companies with the largest market caps on the London Stock Exchange) hasn’t seen the same hyper-growth that the S&P 500 and NASDAQ 100 have, as the FTSE 100 has only grown 14% in the past year. On March 3rd, 2025, the index reached its all-time closing high value of 8,871 points, reflecting extreme confidence in the London markets currently.
The DAX, Germany's most popular index, recently surpassed the 23,000-point mark for the first time. On March 3rd, 2025, the index reached a high of 23,044.02 points, reflecting strong investor confidence in the German market. However, this extreme confidence wasn’t long-lasting as March 4th, 2025 saw a large pullback of 800 points in one day due to increasing tension over the tariff escalations in the country, showing how international economic policy is weighing on German investors’ confidence levels.
The SSE (Shanghai Stock Exchange) experienced solid growth figures in 2024, growing 12.24% YoY from 2023. However, the index’s current standing of 3,320 points doesn’t come close to its all-time high of 6,124 points, showing that Chinese investor confidence isn’t as extreme as other countries and indexes globally.
Potential Risks and Mitigations for 2025
As we head into March 2025 though, the market appears to pulling back slightly from those all-time highs in February. For example, the S&P 500 index is down about 5% from its all-time high in February, and the NASDAQ 100 is down about 8% from its all-time high in February as well. These market pullbacks demonstrate that investors believe those highs in February overvalued the market, leading to a somewhat significant drawback in a relatively short period.
Looking forward to the rest of the year, it’s important that we monitor how investors and consumers react to the economy continuing to push upwards to all-time highs in 2025. Continued upward pricing will reflect positive sentiment, but we must proceed cautiously as investors may believe that the market is becoming overinflated and overvalued, leading to even more significant pullbacks than those of late February and early March of 2025.
Conclusion
In 2024 and early 2025, the market has continued pushing towards all-time highs, leading to multiple of the largest indexes that track market performance returning 20+% in the past year. However, small market pullbacks from those highs may reflect changing consumer and investor sentiment. Keeping an eye on these trends will be crucial for investors looking ahead to the rest of 2025 and beyond!
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