S&P 500 experienced a slight recovery after four weeks of losses, while the Dow Jones Transportation Index fell over 17% from its peak, raising concerns about economic health. Key transportation players, including airlines and trucking companies, faced significant declines due to investor fears of a slowdown amid tariff uncertainties. The Dow Transports index has dropped 8% this year, indicating potential weaknesses in the economy, as various market indicators also show losses. Upcoming economic reports may provide further insights.
Weekly Performance of the S&P 500
The S&P 500 marked a slight recovery this week, breaking a four-week streak of losses. The benchmark index made a comeback after enduring a correction that saw it drop over 10% from its peak in February.
Challenges for the Dow Jones Transportation Index
The Dow Jones Transportation Index experienced a minor decline over the week, adding to the woes of the 20-stock index. Key players in the transportation sector, including airlines, trucking companies, railroads, and parcel delivery services, saw their index fall more than 17% from its record high set in November.
“Transportation serves as a vital barometer for future economic activity,” stated Chuck Carlson, CEO of Horizon Investment Services. “The substantial underperformance raises concerns.”
The struggles of the Dow Transports are attributed to investor anxiety over a potential economic slowdown, driven in part by the uncertainties surrounding U.S. President Donald Trump’s inconsistent tariff policies. The Federal Reserve has also reduced its growth forecast for the U.S. economy this year from 2.1% to 1.7%, with central bank chairman Jerome Powell noting an “unusually high” level of uncertainty.
Since the start of 2025, the Dow Transports index has plummeted by 8%, which is double the decline experienced by the S&P 500 during the same period.
The downturn is widespread across the index. This year alone, shares of parcel delivery giants FedEx and United Parcel Service have decreased by 18% and approximately 9%, respectively. FedEx faced a drop on Friday after revising its annual financial projections downward.
In the trucking sector, companies such as Landstar and JB Hunt Transport Services have seen their shares fall by more than 12%. Airlines have also been hit hard, with some recently downgrading their earnings forecasts. Delta Air Lines and United Airlines Holdings have each lost over 20% in 2025, while American Airlines has experienced a significant decline of about 35%.
Given that many companies within the index are involved in shipping goods nationwide, the Dow Transportation Index serves as a valuable indicator of consumer spending, according to Matt Maley, chief market strategist at Miller Tabak.
“It remains a crucial indicator of economic growth strength, reflecting consumer vitality,” Mr. Maley explained.
The index’s decline “aligns with several weaker data points we’ve observed and supports the downward adjustment of economic growth expectations on Wall Street,” he added.
Some investors monitor the transportation index alongside the Dow Jones Industrial Average to gauge overall market trends, a concept known as the “Dow Theory.” In 2025, the Dow Jones Industrial Average has seen a decrease of 1% and roughly 7% since its December peak.
Additionally, other indices that investors watch as potential indicators of market or economic health have also reported significant losses.
The Russell 2000, which tracks small companies often seen as particularly sensitive to national economic strength, has dipped more than 15% from its 52-week high achieved in November.
Furthermore, the Philadelphia SE Semiconductor Index has fallen over 22% since its record in July. Given that semiconductors are essential components across various products, chip manufacturers are closely observed for economic insights.
“These trends signal potential weaknesses lurking within the U.S. economy,” remarked Matthew Miskin, co-head of investment strategy at John Hancock Investment Management.
In the upcoming week, several reports will offer fresh insights into the economy, including data on consumer sentiment and confidence. A key inflation metric, the monthly personal consumption expenditures price index, is set to be released on March 28.
As tariffs remain a focal point for Wall Street, the Trump administration is preparing to introduce reciprocal tariffs on April 2 to recalibrate the global trading landscape.
As this deadline draws near, stocks in the transportation sector may face heightened volatility, according to Rick Meckler, a partner at Cherry Lane Investments.
“These stocks are central to investors’ concerns regarding tariffs and the potential for an economic slowdown,” he concluded.