March 2024 Market Summary

Equity Markets Performance in March 2024

March was another strong month for equity markets, and closed out a positive quarter to start 2024. There is continued optimism surrounding economic conditions, with further reductions in the rates of inflation seen in several major economies. It’s hoped that central banks will begin the process of lowering interest rates over the course of 2024.

Federal Reserve’s Decision in the US

In the US, the Federal Reserve left its main interest rate unchanged, while it looks for more evidence that inflation is coming under control. The decision kept the target range for the Federal Reserve’s influential rate in the range of 5.25–5.5%, the highest in more than two decades.

The debate is whether higher borrowing costs have done enough to ease the inflationary pressures pushing up prices.

“We want to be careful, and fortunately with the economy growing, the labour market strong and inflation coming down, we can,” Federal Reserve chairman Jerome Powell stated at a press conference following the decision.

Across the trading month, all three of the major indices had a positive March continuing strong gains for the year to date, with Nasdaq adding 1.8% in March and the Dow Jones climbing 2.1%. The S&P 500 was the biggest winner with increases of 3.1%.

Over the quarter, all three indices recorded strong improvements, with the S&P 500 recording 10.44%. The Nasdaq and Dow Jones Average recorded further gains of 8.72% and 4.34% respectively.

UK Economic Indicators

In the UK, inflation slowed in February, keeping the optimism that the Bank of England will remain on track to start cutting interest rates in the months ahead. Consumer prices rose by 3.4% in annual terms after a 4.0% increase in January, the weakest rate of inflation since September 2021, official data showed.

Food and prices at eateries were the biggest downward drags, offset by motor fuels, according to the Office for National Statistics. Core inflation, which excludes energy, food, and tobacco prices, also slowed, dropping to 4.5% from 5.1% in January.

The Bank of England took the decision to ultimately hold interest rates at their current position of 5.25%, however, Governor Andrew Bailey stated that interest rate cuts were on the way for the remaining outlook for 2024.

Furthermore, the Chancellor, Jeremy Hunt, announced the Spring Budget, with cuts to National Insurance announced as well as the introduction of a further £5,000 “British’’ ISA subscription amount for investment within British qualifying assets, in addition to the traditional £20,000.00. The exact qualifying position is to be confirmed following consultation by the Treasury and other interested parties.

For a full breakdown of the announcements made at this year’s Spring Budget, please see find the link to our dedicated blog here.

In summary…

As a result, across the trading month, both the FTSE 100 & 250 were up with gains of 4.13% and 2.94% respectively. This was part of a positive quarter all around, with gains in Q1 for both the FTSE 100 & 250 of 4% and 1.60% respectively.

Please note for this monthly summary, we focus on the major indices within the financial markets such as the FTSE 100 (UK) and the Dow Jones and NASDAQ (US) to provide a factual account of what has happened within a certain index. The performance figures quoted are factual from the month’s trading and this summary is for commentary purposes only.

The performance of these indices is not a representation of an individual fund or portfolio. Past performance is no guarantee of future returns. The value of your investment can go down as well as up. You could get back less than you originally invested.