Tech Turmoil, Trade Tensions and Market Moves: What Investors Need to Know This Week | Affinity Capital

February 6, 2025

This week, the U.S. stock market has experienced notable volatility, shaped by significant developments in the technology sector and rising international trade tensions. As your financial advisors, we see these market shifts as critical reminders of the interconnectedness between technology innovation, geopolitics, and investor sentiment.

At the close of trading on February 5, 2025, the major indices displayed a mixed performance. The S&P 500 made only a fractional gain, reflecting cautious investor optimism. The Dow Jones Industrial Average showed a modest rise, while the tech-heavy Nasdaq Composite managed a slight uptick despite early week turbulence.

One of the most significant developments was the substantial disruption in the technology sector, sparked by the emergence of DeepSeek, a free AI alternative from China. This innovation caused shockwaves across the industry, leading to a sharp decline in NVIDIA's market valuation by $589 billion. As NVIDIA’s competitors reevaluate their AI strategies, the ripple effects are being felt across semiconductor and cloud computing stocks. Investors who have leaned heavily into AI-focused stocks must now rethink their exposure and possibly diversify to mitigate risks.

The market’s apprehension wasn’t confined to the tech sector. The announcement of new U.S. trade tariffs created uncertainty. Although agreements with Mexico and Canada delayed immediate impacts, the potential long-term effects on manufacturing and exports cannot be ignored. In my professional view, these developments signal a period where companies with significant international exposure may face headwinds.

Currency fluctuations added another layer of complexity. The U.S. dollar has surged by more than 7% against a basket of major currencies since September. This strength, driven by rising bond yields and robust U.S. economic growth, has nearly pushed the euro to parity with the dollar. For American consumers and businesses importing goods, this might provide short-term benefits. However, exporters could find their products less competitive abroad, a factor that may weigh on earnings reports in upcoming quarters.

On the bright side, the broader economy shows resilience. GDP growth remains near its short-run potential, unemployment rates are low, and consumer spending is robust. The resurgence of manufacturing, particularly in AI-related sectors, hints at long-term growth opportunities despite current market turbulence.

As we look ahead, we must brace for continued market volatility. The swift emergence of new AI technologies underscores the importance of diversification and a cautious investment strategy. While it’s tempting to chase the latest tech trend, a balanced portfolio remains the best defense against market shocks. Furthermore, the evolving trade landscape demands close monitoring. Policy changes can have swift and significant impacts, making it essential for investors to stay informed and agile. Companies with strong domestic operations and less exposure to international trade risks may provide safer havens during this period.

While the market faces challenges from technological disruptions and geopolitical uncertainties, strong economic fundamentals offer a measure of stability. 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.