Industrial output dropped 0.5% in March, reversing a 0.7% rise in February as both manufacturing and utility sectors showed broad declines. Economists had projected a 0.1% gain, amplifying concerns over moderating economic momentum.

The unexpected contraction introduces potential headwinds for S&P 500 ETF, particularly within industrial and utility components, as investors recalibrate earnings forecasts and monitor Federal Reserve policy for signs of additional stimulus or rate adjustments.