The S&P 500 Index is falling, not rising, after the Fed's decision to cut rates, indicating a recession.
the S&P 500 Index is falling, not rising, after the Fed's decision to cut rates, indicating a recession.
Companies have stopped talking about a soft landing and are concerned about tariffs and uncertainty.
Consumers are spending less on everything from food to travel, and layoffs are on the rise.
The U. S. stock market is sending alarm bells ringing. Since the Federal Reserve began cutting rates in September 2024, the S&P 500 index has fallen 2%, which is atypical. Normally, the S&P 500 adds 1% within six months of a rate cut.
However, when the economy is in recession, the index drops 6% in six months and 10% in a year. The biggest drop recorded during past recessions was 15% in eight months, according to CNBC.
If the Fed manages to avoid a recession, the market usually recovers. When a recession is avoided, the S&P 500 index rises 10% in six months and 15% in a year. But judging by the developments, investors are not betting on that outcome. The Fed is cutting rates, but the markets aren't reacting the way they should if the economy is doing well.
CEOs have stopped talking about the "soft landing" - the idea that the economy can slow down without a crisis. In the last quarter of 2024, the phrase was mentioned in 61 earnings calls. Since the beginning of 2025, it has only been mentioned seven times. That's a steep decline. Businessmen are no longer optimistic.
In a survey conducted March 4-5 by Chief Executive magazine, 220 CEOs shared their predictions for the coming year. The results were the worst since November 2012. The National Federation of Independent Business reported that small business
#optimism fell in February and policy uncertainty reached its second-highest level since 1985.
corporations are not openly criticizing Donald Trump's policies, but the focus of their attention is shifting.
Spending is changing.
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