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.

Key Market Drivers

Fed Independence & Rate Policy Under Scrutiny

President Trump’s comments hinting at possibly firing Fed Chair Powell triggered brief dips in both equities and the U.S. dollar. While equities quickly bounced after Trump walked back the comments, investor awareness of potential political interference with the Federal Reserve spiked, pushing 10‑year Treasury yields higher and nipping at risk appetites.

 

Strong U.S. Economic Data

U.S. retail sales surged 0.6% in June, topping expectations and indicating underlying consumer resilience. Weekly unemployment claims fell, confirming steady job creation. These positives helped overshadow fears around tariffs, emphasizing that demand remains firm—enough to keep the Fed from moving too soon toward easing.

 

Earnings Momentum

Tech earnings led the charge this week. Taiwan Semi-Conductor posted record profits, citing strong AI-chip demand and lifting chip stocks broadly. United Airlines also boosted market tone with upbeat results, while PepsiCo saw modest revenue growth. These earnings outliers lent support amid broader–but tempered–sentiment.

 

Tariff Updates & Global Trade Tensions

Trade news kept investors on edge. Trump levied fresh 30% tariffs on EU goods effective August 1, alarming markets. He also signaled tariffs on copper and Canadian imports, fueling uncertainty. These developments may inject inflationary pressures via input‑cost passes, which in turn could limit Fed flexibility on rate cuts.

 

Global Market Ripple Effects

India’s Sensex and Nifty experienced brief softness on international trade nervousness, then rebounded after cooler inflation in Mumbai. In the UK, markets advanced after softer labor-market data boosted expectations of an August rate cut by the Bank of England.

 

Market Implications & Near-Term Outlook

  • Inflation trajectory: While headline CPI remains at moderate levels (~2.6% year-over-year in June), trade-driven costs are creeping upward. Market expectations now imply two 25-basis-point Fed cuts by year-end, but this is being reevaluated given stronger growth indicators.

  • Earnings season: Coming weeks will highlight major banks like JPMorgan, Wells Fargo, Citigroup, Goldman Sachs and Morgan Stanley. These reports could offer valuable insight into credit conditions, trading revenues, and the consumer credit cycle—highly watched as signs of broader economic resilience or stress.

  • Tech outlook: The continued NASDAQ rally, fueled by gains in chipmakers like Nvidia and Taiwan Semi-Conductor, underscores AI-driven demand. However, any shift in trade policy that stokes inflation or supply chain disruptions could threaten margins.

  • Volatility watch: Despite periodic headlines, volatility remains subdued—a sign of lingering confidence but also of hesitant positioning. Watch for reacceleration in the Volatility Index if geopolitical or policy uncertainty spikes again.

Forecast for the Week Ahead

Looking ahead, expect continued range-bound action, punctuated by:

  • Fed communications & data: Speeches by Fed speakers, plus second-tier data releases (industrial production, consumer sentiment) will influence rate outlooks.

  • Earnings flow: Bank reports may sway sentiment; strong results could reinforce equity risk appetite, while any signs of consumer/stress cracks may trigger pullbacks.

  • Trade/tariff narratives: Upcoming deadlines (e.g., new copper tariffs Aug 1) and trade talks with Canada and the EU will be a macro swing factor. Markets may react quickly to any unexpected developments.

  Strategy Considerations for Clients

  • Diversified positioning: Equities remain attractive amid growth and earnings resilience. But monitor tech concentration risk—having some exposure outside the mega-cap tech cohort may help hedge volatility.

  • Fixed-income focus: Rising yields suggest opportunities in shorter-duration credit and inflation-sensitive instruments. However, long duration still faces pressure unless data shows clear cooling.

We’re always honored to be part of your financial journey. Whether you’re navigating changing markets or planning for the next generation, we’re here to provide clarity and confidence every step of the way. At Affinity Capital, Wealth Management for Life isn’t just a promise—it’s our purpose.

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.

Tariff Turbulence, Labor Weakness and Market Resilience: Weekly Update | Affinity Capital

July 3, 2025
The U.S. equity markets were marked by a modest pullback in the Nasdaq, while the Dow and small caps posted gains. Through Tuesday, the Dow Jones surged roughly +1.5% , while the S&P 500 added about +0.4% and the Nasdaq slipped ~‑0.3% for the week. Mega-cap technology stocks led earlier gains, pushing both the S&P and Nasdaq to fresh all-time highs by early July, building on a two‑month rally of nearly +24% from April lows.