Market Pulse — Relief Rally Amid Trade Tensions and Earnings Surprises | Affinity Capital

April 24, 2025

U.S. equities rebounded sharply this week, buoyed by a softer tone from the White House on trade and monetary policy, as well as strong earnings from key sectors. The S&P 500 climbed 1.8%, the Dow Jones Industrial Average gained 1.2%, and the Nasdaq Composite surged 2.6%, with the tech-heavy index leading the charge thanks to robust pe rformances from semiconductor stocks. 

 

The rally was sparked by President Trump’s unexpected shift in rhetoric, signaling openness to reducing tariffs on Chinese imports and affirming support for Federal Reserve Chair Jay Powell. This policy pivot eased investor concerns and helped lower Treasury yields, providing a tailwind for equities.  Treasury Secretary Scott Bessent’s acknowledgment that current tariffs are “not sustainable” further fueled optimism for a potential de-escalation in trade tensions.

 

Despite the positive market movement, underlying economic indicators painted a more cautious picture. The International Monetary Fund (IMF) urged global leaders to resolve trade tensions swiftly, citing the threat they pose to global economic stability.  Additionally, consumer confidence in Europe showed signs of weakening, with expectations of declining business morale in Germany and falling consumer confidence in France and Britain.

 

Corporate earnings were a mixed bag. General Electric (GE) reported strong earnings and estimated manageable tariff-related costs, resulting in a stock rise. In contrast, RTX Corporation faced a larger-than-expected $850 million in tariff costs, leading to a 10% stock drop.  These divergent outcomes underscore the uneven impact of trade policies across industries.

 

Looking ahead, several key economic events could influence market sentiment. The April non-farm payrolls report, due on May 2, will provide insight into labor market strength. The Federal Reserve’s policy meeting on May 7 and subsequent commentary may address inflationary effects of tariffs. Additionally, CPI data on May 13 and Core PCE data on May 30 will reveal how tariffs are impacting consumer prices.  We will also be closely watching for developments in trade negotiations, particularly as the 90-day pause on reciprocal tariffs ends on July 9.

 

While this week’s rally offers a welcome respite, the market remains sensitive to policy shifts and economic data. We will stay vigilant and consider the potential implications of upcoming economic reports and geopolitical developments.

 

We’re always here to provide clarity and support as you navigate the markets. Our focus remains on helping you make informed decisions with confidence. At the core of our approach is “Wealth Management for Life”—a promise to be your long-term partner in building and preserving financial well-being for you and your family.

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.