CoreWeave’s IPO and Inflation Data Headline a Week of Market-Moving Events

Next week isn’t just another round of meetings and spreadsheets – it’s shaping up to be a pivotal moment for understanding the market’s trajectory. We’re diving deep into two mega-events: CoreWeave’s potentially game-changing IPO, which could signal the health of the AI boom, and the crucial inflation data release that the Fed will be poring over. But that’s not all! We’ll also be dissecting PMI readings, GDP estimates, and keeping a close eye on those ever-present tariff updates. Consider this your cheat sheet to navigate the week ahead with confidence. Let’s get started!

Upcoming Economic Indicators

Next week features a busy economic calendar that will provide investors with crucial insights into the current state of the U.S. economy. These indicators will be particularly significant as markets assess the Federal Reserve’s next moves regarding monetary policy.

Flash PMI Readings

Investors will receive flash PMI (Purchasing Managers’ Index) readings from S&P, offering an early estimate of business conditions across key sectors. Flash services PMI is based on surveys of more than 400 senior purchasing executives covering transport, communication, financial intermediaries, business services, and other sectors. As one of the first economic indicators released each month, these readings provide valuable evidence of changing economic conditions ahead of comparable government statistics.

Published by IHS Markit, the flash PMI data is based on approximately 85-90% of total PMI responses and is designed to provide an accurate advance indication of final PMI data. This early insight into business conditions can have a significant effect on currency markets and trading decisions.

Q4 GDP Growth Estimate

Another estimate on U.S. Q4 GDP growth will be released, providing further clarity on economic performance in the final quarter of 2024. Previous data showed that U.S. GDP grew at an annual rate of 2.3% in Q4 2024, which was lower than the 3.1% growth seen in Q3 but still reflecting continued economic expansion.

For context, the U.S. economy grew 2.8% overall in 2024, slightly below the 2.9% increase recorded in 2023. The fourth quarter growth was primarily driven by increases in consumer spending and government spending, while investment decreased during this period.

Looking ahead, the Federal Reserve’s Open Market Committee has projected lower growth for 2025 at 1.7%, down from its December forecast of 2.1%. This estimate comes as the Trump administration has suggested potential changes to how GDP is measured, possibly separating government spending from the calculation to increase transparency.

Core PCE Price Index

Friday will see the release of the core personal consumption expenditures (PCE) price index for February, which is widely recognized as the Federal Reserve’s preferred measure of inflation. Unlike the regular PCE index, the core version excludes volatile food and energy prices, providing a more stable reflection of underlying inflation trends.

The Core PCE Price Index measures changes in the prices of goods and services purchased by consumers and non-profits in the United States. Prices are weighted according to total expenditure per item, measuring price changes from the consumer’s perspective. This metric is crucial for the Fed’s monetary policy decisions, as they typically target inflation at around 2%.

Given recent comments from Fed Chair Jerome Powell about tariffs having only “transitory” effects on inflation, this release will be closely watched for any signs of persistent inflation pressures that might influence future interest rate decisions.

CoreWeave IPO: A Test for AI Market

The IPO market will be in focus as American cloud computing firm CoreWeave (CRWV) prepares to debut on the Nasdaq. This offering represents a significant test for the artificial intelligence sector, which has seen fluctuating investor sentiment in recent months.

Company Background and Financials

CoreWeave is an AI firm with close ties to bitcoin miner Core Scientific. The company reported impressive revenue of $1.9 billion in 2024, though it posted a net loss of $863 million due to significant AI-related investments. Currently, CoreWeave carries an accumulated deficit of $1.5 billion as it continues to expand its infrastructure.

The Nvidia-backed company is building 500 megawatts of infrastructure for AI-related purposes in partnership with Core Scientific, which was previously CoreWeave’s biggest GPU supplier. This expansion comes amid surging demand for AI technologies across various industries.

IPO Details and Valuation

While the original text indicates CoreWeave plans to raise up to $2.7 billion through its initial public offering and is seeking a valuation of approximately $26 billion, more recent reports suggest the company might be aiming even higher, potentially raising $4 billion at a valuation exceeding $35 billion[5].

The discrepancy in figures highlights the dynamic nature of the IPO process and possibly growing optimism about the company’s prospects as it approaches its market debut.

Significance for AI Industry

The CoreWeave IPO will serve as a crucial barometer for investor sentiment toward artificial intelligence companies. With the AI sector experiencing some cooling after initial enthusiasm, this offering will test whether investors remain willing to fund AI infrastructure at high valuations.

Industry projections cited by CoreWeave suggest that AI could generate a cumulative global economic impact of $20 trillion, representing 3.5% of global GDP, by 2030. The success or struggle of this IPO may indicate market confidence in these ambitious forecasts.

Tariff Developments and Economic Impact

Trade policy continues to be a focal point for market participants as new tariffs are set to take effect in the coming weeks.

Upcoming U.S. Reciprocal Tariffs

Traders will be closely monitoring any updates on upcoming U.S. reciprocal tariffs scheduled to go into effect on April 2. These tariffs are part of the Trump administration’s broader trade policy and could have significant implications for international commerce and domestic prices.

Wall Street analysts are particularly interested in understanding the scope and potential economic impact of these tariffs, especially as they may affect supply chains and consumer prices across various sectors.

Federal Reserve’s Stance on Tariffs

Federal Reserve Chair Jerome Powell recently stated that any effects on inflation from U.S. President Donald Trump’s tariffs would be “transitory.” This assessment suggests the central bank may not view tariffs as a long-term inflationary concern that would necessitate a more aggressive monetary policy response.

During the recent Federal Open Market Committee meeting on March 19, the Fed maintained the federal funds rate at 4.25% to 4.50%. Market participants are looking for clarity from the central bank on how it views the potential impact of tariffs on inflation and whether this might influence future rate decisions.