Schwab Market Update

Durable Goods Rise While Sentiment Falls

March 26, 2025 Joe Mazzola

A better-than-expected durable goods report struggles to boosts stocks as investors deal with falling consumer sentiment and weak outlooks from services firms.

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Published as of: March 26, 2025, 9:12 a.m. ET

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The markets	Last price	Change	% change
S&P 500^® index	5,776.65	+9.08	+0.16%
Dow Jones Industrial Average^®	42,557.50	+4.18	+0.01%
Nasdaq Composite^®	18,271.85	+83.26	+0.46%
10-year Treasury yield	4.34%	+0.03	--
U.S. Dollar Index	104.29	+0.11	+0.11%
Cboe Volatility Index^®	17.29	+0.14	+0.82%
WTI Crude Oil	$69.60	+$0.60	+0.88%
Bitcoin	$87,685	-$470	-0.53%

(Wednesday market open) Equity futures were relatively unchanged ahead of the market open despite a better-than-expected February durable goods report. The forecast for durable goods orders was a 1% decline but they actually rose 0.9% month over month. Over the last year, five of the reports have been negative. Orders minus transportation rose 0.7%, better than the consensus of 0.2%. Orders minus defense spending rose 0.8%.

Mortgage applications fell 2% the week of March 21 as the average 30-year mortgage rate was nearly unchanged, falling from 6.72% to 6.71% according to the Mortgage Bankers Association. The number of mortgage applications and refinances have fallen three weeks in a row.

Yesterday's Philly Fed services sector survey found the six-month outlook of services firms plunged in March making a new cycle low. The new low is near COVID pandemic levels. Almost 46% of firms surveyed expected decreases, 26% expect increases, and 23% were unchanged. Surveys like this fall under the "soft" data category, which has been diverging from the hard data, said Schwab's Nathan Peterson, director of derivatives analysis at the Schwab Center for Financial Research. Nonetheless, investors may find the pessimism concerning.

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Three things to watch

Bad vibes: The Conference Board’s consumer confidence report dropped 7.2 points in March to 92.9 versus the 96 expectation, hitting a 12-year low. "Markets appear to be relatively forgiving of the soft data until, and if, it shows up in the hard data," according to Peterson. "Perhaps the tariff uncertainty explains poor confidence from both business and consumers over the last month."
Get real: The real estate market may be weakening despite positive news. A better-than-expected building permits report was released on Tuesday, but it has been lower three months in a row. The S&P CoreLogic Case-Shiller Index rose 4.7% year over year in January but fell short of the consensus estimate of 4.8%. Most gains took place in New York, Chicago, and Boston. However, the Northeast saw a 21.4% drop in February new home sales. The new home sales report disappointed, coming in lower than the consensus despite being higher than the month before.
Stronger steel: Retailers could feel the effects of negative consumer confidence. The S&P Retail Select Index (SPSIRE) slid .97% on Tuesday. Synchrony Financial (SYF), which issues credit cards in partnership with retailers, reported that they've seen belt-tightening measures among financially healthy customers, but so far repayments remain on track.

On the move

GameStop (GME) rallied almost 14% in extended hours trading as traders reacted to its earnings report after Tuesday's closing bell. Despite lower than expected sales, GME reported much higher than expected earnings. GME announced that the board had approved plans to buy bitcoin as a "treasury reserve asset."
Dollar Tree (DLTR) announced that it would be selling Family Dollar to private equity firms for $1 billion after reporting disappointing earnings. DLTR traded 4.33% higher in premarket trading.
Cintas (CTAS) reported better than expected earnings and revenues leading to a premarket rally of 3.92%.
Paychex (PAYX) topped analysts’ earnings forecasts and nailed the revenue estimate, but investors appeared unimpressed in premarket action as the stock slid 0.84%.
Chewy (CHWY) topped sales and earnings estimates by growing its active customer base, particularly with its autoship services. The news prompted the stock to rally 3.84% in the early morning session.
Copper futures (/HG) shot up to $5.37 this morning before retreating to $5.25 but remain on track for another 52-week high. The commodity continues to rally on tariff talks that are nearer to fruition.

More insights from Schwab

Using futures for input: The currency, commodity, bond, and stock markets are interrelated and Looking to the Futures can help you identify what's going on in the futures market that may affect your stocks.

Chart of the day

One-year $DJI chart hit highs in November and January near 45,000, up from below 41,000. A support line is at 41,900. A rise in the RSI indicator July is in red and a decline in December in blue. A down-sloping line runs from July to late February.

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Data sources: S&P Dow Jones Indices. Chart source: thinkorswim® platform.

Past performance is no guarantee of future results.
For illustrative purposes only.

Traders may have been looking at the Dow Jones Industrial Average ($DJI) last month and seeing a potential double top reversal pattern. The RSI showed the uptrend was weakening with a bearish divergence from July to December, and then a "double divergence," which many technicians see as a stronger signal, from December to January. The Dow broke support on March 11, giving a traditional double top entry signal. Old support acted as new resistance when the index rallied until Monday when the Dow broke resistance and moved higher, which may have spoiled the reversal trade for some. It could be that the pattern still plays out and the index falls, but only time will tell.

The week ahead

Check out the Investors' Calendar for a summary of the top economic events and earnings reports on tap next week.

March 27: Final Q4 gross domestic product, wholesale inventories, pending home sales, and expected earnings from Lululemon (LULU), Walgreens Boots Alliance (WBA), AAR (AIR), and Winnebago (WGO).
March 28: PCE price index and Michigan consumer sentiment.
March 31: Chicago PMI and Dallas Fed Manufacturing Index and earnings from PVH (PVH).
April 1: ISM Manufacturing PMI^®, JOLTs job openings, and earnings from Cal-Maine Foods (CALM).
April 2: ADP employment change, factory orders, and earnings from RH (RH) and BlackBerry (BB).

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