Markets Remain Resilient… But Volatility Lurks Beneath the Surface
Invested In Us | Issue 2
As of August 1, the S&P 500 is up 6.9% year-to-date, supported by strong corporate earnings and broadening participation across sectors. But that headline doesn’t tell the full story.
Earlier this year, following major geopolitical developments and tariff announcements, the market briefly dipped into bear market territory, falling nearly 20%. While the speedy recovery has been encouraging, the environment remains far from stable.
Key sector trends:
Industrials and Utilities have led recent gains
Consumer Discretionary is down nearly 5%
The S&P 500 Equal Weight Index — a broader measure of market health — is up nearly 4%, suggesting strength beyond just mega-cap tech
Why it matters: A strong, diversified rally reflects a healthier market than one driven by a few companies. But volatility, especially tied to tariffs and geopolitics, continues to be a key risk.
The Fed, Rate Cuts & Real Impact on You
There’s been growing debate about interest rates — and the tension between the White House and the Federal Reserve is escalating.
President Trump has publicly criticized Fed Chair Jerome Powell (his own appointee), claiming the Fed was “late” in cutting rates.
Some economists argue rate cuts may be justified due to high borrowing costs (especially for homes and cars), while others point to low unemployment and strong GDP (a country’s total economic output) as evidence that cuts are premature.
Here’s what to know:
The Fed controls short-term rates, but mortgage rates are more directly influenced by the 10-year Treasury yield.
America’s $37 trillion debt and growing deficits are keeping long-term yields elevated, putting upward pressure on mortgage and credit card rates — regardless of what the Fed does.
Bottom line: A Fed rate cut may not provide the relief consumers and investors are hoping for — especially with structural debt challenges looming.
A Jobs Report — and a Firing
Last Friday, the Bureau of Labor Statistics reported:
Estimated 73,000 jobs created in July
When accounting for downward revisions, it marked the weakest three-month stretch since the height of COVID
In response, Trump fired BLS Commissioner Erika McEntarfer, despite her bipartisan confirmation (86–8 in the Senate). The President publicly accused the BLS of manipulating data — a claim widely rejected by economists, including William Beach, his own prior BLS appointee.
Why this matters: The BLS is the gold standard for independent labor data. Undermining its credibility threatens investor trust, policymaking, and America’s financial reputation globally. During the chaos driven by “Liberation Day,” the bond market experienced serious volatility as investors briefly questioned America’s financial credibility. Public disputes like the firing of the BLS Commissioner could add to concerns, further undermining confidence in the integrity of U.S. institutions.
Global Trade: Tariffs, BRICS & Geopolitics
Tensions continue to rise on the international stage — both militarily and economically.
Russia has replenished much of the equipment lost in Ukraine, signaling a long-term commitment to the conflict.
NATO leadership warns the U.S. must be prepared for a two-front conflict: a Russian escalation in Europe and potential Chinese aggression in Taiwan.
In response, Trump has moved nuclear-capable equipment into Europe and signaled he is open to using tariffs as leverage against Russia — and any country still purchasing Russian oil.
While Russia is not the world’s largest exporter, its role in global energy markets is significant due to its close relationships with China and India — both major oil consumers and founding members of the BRICS alliance (Brazil, Russia, India, China, South Africa).
Tariff Timeline:
Trump’s “Liberation Day” introduced sweeping tariffs, aimed at reshaping global trade.
Several agreements have been announced, but many negotiations remain ongoing.
Despite uncertainty, the U.S. Treasury has reportedly collected $152 billion in customs duties this fiscal year — nearly double the amount at this point last year.
Why this matters:
Tariffs are unpredictable, and their costs are often absorbed by a combination of importers, exporters, and consumers. As trade tensions escalate, energy markets and global supply chains face new volatility — all of which affect inflation, earnings, and investor sentiment.
Investor Perspective
As we move into the fall — a historically volatile season for markets — here’s what to keep in mind:
Markets are resilient but reactive — policy uncertainty and geopolitical risk remain top of mind.
Diversification is essential — even more than usual in an environment where headlines can drive short-term moves.
Data integrity matters — investors rely on accurate information to make decisions. Political interference in institutions like the Fed or BLS creates risk.
At NJK, we continue to believe that long-term clarity beats short-term chaos. In moments like these, the most valuable asset is not a hot stock — it’s a calm, focused mindset.
This Week’s Takeaway
“Just because the market is near its highs doesn’t mean the economy is. Stay sharp. Stay diversified. And stay focused on what you can control.”
Community Spotlight
At NJK, we believe investing isn’t just about numbers — it’s about neighbors. That’s why each week, we’re highlighting a local entrepreneur, family, or initiative that reflects the values of discipline, purpose, and resilience.
Alexandra Szebenyik | The Sandra Effect
This week, we’re spotlighting Alexandra Szebenyik, a talented Fairfield-based photographer whose eye for detail and professionalism helped capture the images now featured across NJK’s platforms. We’re grateful for her work and look forward to future collaborations.
Explore her work and book a session: alexandraszebenyik.com
With Respect & Purpose,
Kevin Nunez
Founder & CEO, NJK Partners
📧 kevin@njkpartners.com | 🌐 njkpartners.com | 🎥 YouTube Shorts
Resource Notes
NATO Commander Grinkevich: Reuters, July 2025
Russian Equipment Rebuild: Bloomberg, July 2025
Trump Nuclear Equipment Deployment: Politico, July 2025
Tariff Collections: U.S. Treasury via New York Times, July 31, 2025
BLS Firing & Job Report: CNN, August 2, 2025
Interest Rates & Mortgage Impact: WSJ, July–August 2025
S&P 500 Performance: FactSet, August 1, 2025
BRICS Oil Trade Trends: Financial Times, July 2025