What Happened?
Shares of airline company United Airlines Holdings (NASDAQ:UAL) jumped 6.4% in the afternoon session as stocks rebounded to start the session amid continued market volatility and moved slightly higher after the Federal Open Market Committee kept rates at 4.25% to 4.50% in its March 2025 meeting. The Jerome Powell-led committee also hinted at two more rate cuts for the year, saying, "Uncertainty around the economy has grown."
The good news is that holding rates steady and signaling two additional cuts this year means no surprises (the market dislikes surprises). The bad news is that the Fed reduced its outlook growth to 1.7%, down from the previous projection of 2.1% in December. At the same time, the inflation outlook was raised to a 2.8% annual increase for core prices, up from the prior projection of 2.5%. This suggests the Fed sees the macro tilting towards a stagflation scenario, where inflation rises as economic growth slows.
After the initial pop the shares cooled down to $74.30, up 4.1% from previous close.
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What The Market Is Telling Us
United Airlines’s shares are very volatile and have had 20 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
United Airlines is down 22.1% since the beginning of the year, and at $74.30 per share, it is trading 32.8% below its 52-week high of $110.52 from January 2025. Investors who bought $1,000 worth of United Airlines’s shares 5 years ago would now be looking at an investment worth $3,492.
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