S&P 500 Outlook: Will March Bring a Market Rebound?

The early months of 2025 have seen considerable volatility in U.S. equity markets. February brought a 1.4% decline for the S&P 500, effectively erasing earlier gains. Historically, however, March has often been a month of recovery, frequently outperforming the preceding two months.

S&P 500 Recovery Prospects in March

Data from the past two decades indicates that March generally shows stronger performance than January and February. Analyzing the last 10 years reveals March has outpaced February, while longer-term reviews over 15 years show similarly robust trends in these early months. These observations offer cautious optimism for a potential S&P 500 rebound in March.

What Factors Could Spur a Turnaround?

Historical data suggests the S&P 500 often improves in March. However, several factors warrant consideration:

• Post-Presidential Election Trends: Market performance in the final month of the first quarter can be somewhat muted following a presidential election.
• Recent Trading Patterns: Over the past 21 years, two patterns have emerged. Typically, the market starts slowly, dips mid-month, and finishes strongly. In post-election years, the market might start strong but lose momentum later in the month.

Key Economic Events Expected This Month

Beyond seasonal trends, March will be influenced by key economic events:

• March 7: The U.S. nonfarm payroll report will offer insights into employment trends and unemployment rates.
• March 18–19: A Federal Reserve meeting is scheduled to discuss potential interest rate adjustments and revised economic and inflation projections. The meeting’s outcome could significantly impact the market’s direction.

Investment Implications

While historical patterns suggest a possible March upswing, investors should remain cautious. Monitoring macroeconomic indicators, geopolitical events, technology sector performance, and Federal Reserve communications is crucial. These factors will determine whether current market conditions present a viable buying opportunity.