Adapting to Change: Market Moves and What’s Next | Affinity Capital

April 17, 2025

This past week, financial markets have grappled with mounting trade tensions, renewed geopolitical uncertainty, and a shifting global economic outlook, leading to pronounced volatility across sectors. Despite a promising start to the week, sentiment quickly shifted as investors weighed the impact of fresh U.S. trade restrictions and cautious commentary from central banks.

Markets initially rose on Monday, following news that President Trump would temporarily ease tariffs on select consumer electronics to avoid disrupting back-to-school sales. The S&P 500 climbed 0.8%, while the Dow Jones Industrial Average gained 0.7%, buoyed by optimism around short-term consumer resilience. However, these gains were erased midweek as the U.S. imposed new limits on chip exports to China—particularly targeting advanced AI semiconductors. The tech-heavy Nasdaq slipped nearly 1.3% by Wednesday's close.

The selloff was especially pronounced in semiconductor stocks. Nvidia, a bellwether for AI innovation, saw shares tumble over 6.5% after projecting up to $5.5 billion in lost revenue from halted chip sales to China. The broader Philadelphia Semiconductor Index also declined more than 4% over the week.

  Other notable developments this week include:

  • Airline Sector Weakness:  Delta, United, and American Airlines, which had forecast a rebound year in 2025, now face slowing demand due to geopolitical concerns and climate-related disruptions. Analysts expect an earnings recession for the sector.
  • Fed Watch:  Federal Reserve Chair Jerome Powell emphasized a “wait-and-see” approach, citing conflicting data signals. While inflation remains above target, signs of softening consumer demand and tighter credit conditions are tempering expectations for immediate rate hikes or cuts.
  • Global Trade Downgrade:  The World Trade Organization downgraded its 2025 global trade growth outlook from 2.7% to a contraction of 0.2%, citing weakened demand and higher barriers.
  • Mixed International Picture:  China's Q1 GDP beat expectations at 5.3%, but economists remain wary due to anticipated fallout from ongoing U.S. tariffs. Meanwhile, the Bank of Japan is expected to cut its growth forecast as export conditions deteriorate.

Looking forward, we anticipate continued market sensitivity to macro headlines, particularly around trade developments and upcoming corporate earnings. While volatility may persist, long-term investors should remain focused on fundamentals, diversification, and quality. Defensive sectors and dividend-paying stocks may present more stability in the near term, while opportunities in AI, clean energy, and infrastructure remain compelling themes for those with a longer horizon.

Our Affinity Capital Portfolios have purchased numerous partial positions in several stocks paying strong dividends within defensive sectors.

As always, we welcome your questions and are here to support you. At the heart of everything we do is our commitment to "Wealth Management for Life"—providing enduring guidance for you and your family’s financial success.

Signals from the Fed: Inflation, Growth, and What Comes Next

August 22, 2025
It was a Fed-heavy week, with three major developments that matter for markets and the economy. FOMC minutes (July 29–30) — released Wednesday (Aug. 20). The minutes reinforced a data-dependent stance : participants saw continued progress on inflation but noted that risks aren’t one-way, citing pockets of labor-market cooling and the growth impact of tighter financial conditions. Policymakers emphasized flexibility and the need to see inflation moving durably toward 2% before declaring victory. For investors, the takeaway is that the bar for rapid policy shifts remains high, but the Committee is clearly keeping both sides of the mandate in view. Weekly balance sheet (H.4.1) — released Thursday (Aug. 21). The Fed’s weekly statement showed the usual moving pieces: securities holdings, reserve balances, and program usage. While week-to-week changes can be noisy, the release remains a useful pulse on system liquidity and the runoff of the Fed’s portfolio under quantitative tightening . Markets watch aggregate reserves and Treasury General Account flows because they can nudge front-end rates and funding conditions at the margin. Jackson Hole — Chair Powell’s Friday address. At the Kansas City Fed’s annual symposium, Chair Powell underscored that policy decisions will continue to be guided by incoming data . He highlighted the balance between sustaining expansion and finishing the job on inflation , noting tariff-related price pressures and supply-chain considerations among factors being monitored. The message: no preset path, but openness to adjust as evidence accumulates. Historically, Jackson Hole is more about long-term framework and risk management than near-term moves, and that tone held this year. What it means for the days ahead Near-term market drivers will be how inflation and labor data align with the Fed’s “proceed carefully” posture. • If inflation continues to edge lower while growth holds steady, the door stays open to gradual policy easing later this year. • If price pressures re-accelerate—or if hiring slows more sharply than expected—the Fed may extend its wait-and-see approach. Liquidity dynamics from the Fed’s balance sheet runoff will remain a background factor , but the central story is still inflation’s glide path and the durability of demand . Investors should expect choppy trading around key data releases , with markets pricing probabilities rather than certainties. As always, we welcome your questions and are here to support you . At the heart of everything we do is our commitment to “ Wealth Management for Life ”—providing enduring guidance for you and your family’s financial success.

Fed Moves and Market Trends | Affinity Capital

August 6, 2025
Markets entered the week with a boost of optimism, fueled by softer labor data and growing chatter that the Federal Reserve might be leaning toward a rate cut this fall. But that optimism didn’t last long . As the week unfolded, economic uncertainty returned to center stage: fresh concerns about tariffs, underwhelming corporate earnings in some sectors, and signs of consumer fatigue in key parts of the economy tempered the early enthusiasm.

Weekly Market Update: Stability Amid Data and Tariff Jitters | Affinity Capital

July 17, 2025
This week’s stock markets were marked by tight trading ranges, record-setting highs in tech, and a backdrop of macro uncertainty. The S&P 500 (through SPY), Nasdaq (QQQ), and Dow (DIA) eked out modest gains, shrugging off headline volatility tied to Fed independence concerns and escalating tariff threats.