A whirlwind of impactful investing news is threatening to reshape the investing climate. Nvidia and Bitcoin have hit major milestones, optimism is high for the U.S. banking business, gold is poised for growth as inflation rises—all while the U.S. tariff policy and its outcomes remain uncertain. The mix of positive and negative news creates a ripe environment for stock-price volatility this summer and beyond.
Lukman Otunuga, senior market analyst at global broker FXTM, sees the potential for a shake-up across financial markets. “Nvidia’s AI momentum, upbeat bank earnings, and a potentially hot inflation report are combining to create the perfect storm of volatility—with major implications for equities, currencies, and commodities alike,” Otunuga explains.
So far this week, stock prices have held steady. The S&P 500 (^GSPC) is up 0.1%, the Nasdaq Composite (^IXIC) is 0.7% higher and the Dow Jones Industrial Average (^DJI) gained 0.2% since this week’s trading opened on Monday. The modest growth implies investors are awaiting more information on the economy and earnings before reshuffling their portfolios.
Investing Headlines To Watch
These are the investing stories to watch:
- Nvidia becomes the world’s first $4 trillion company. Nvidia first reached a $4 trillion value briefly on June 9 in intra-day trading. The AI chipmaker then settled into the milestone valuation two days later. Monday, Nvidia announced its expectation to resume H20 chip sales to China, which had previously been banned by the Trump administration. Next month, analysts expect Nvidia to report EPS of $1 for its July quarter.
- Bitcoin eclipsed $120,000. The price of Bitcoin reached $123,091.61 on Monday before pulling back to about $119,000. Bitcoin’s price is benefiting from rising interest in Bitcoin ETFs as the U.S. government considers easing crypto regulations. Bitcoin is up 27.4% this year.
- Big banks are outperforming. Bank of America (BAC), Citigroup (C), Goldman Sachs (GS), JP Morgan Chase (JPM), Morgan Stanley (MS) and Wells Fargo reported higher-than-expected earnings for the second quarter. U.S. banking regulators are in the process of easing capital requirements, which would give banks more freedom to pursue growth.
- Gold is hovering. Gold has been hovering in the mid-$3,300s this week, but a change in the appetite for stocks could raise demand for the precious metal.
- Inflation is on the rise. The latest Consumer Price Index report showed inflation moved higher in June to 2.7% compared to a year ago. In May, the one-year inflation rate was 2.4%. Wholesale prices, as measured by the Producer Price Index, increased 2.3% in June from a year ago. This was lower than May’s annual increase of 2.7%. Rising inflation could delay interest-rate reductions by the Fed and reduce investors’ appetite for risk.
- Tariff talk is heating up. U.S. President Donald Trump continues to threaten higher tariffs effective August 1. Trump has announced country-specific tariffs ranging from 20% to 50% plus levies on copper, pharmaceuticals and semiconductors. Stock prices have been largely unaffected by these announcements. Investors may be hoping the TACO theory—Trump Always Chickens Out—leads to another tariff pause. If that doesn’t happen, stock prices may be due for a major reset as August approaches.
Readying For Volatility
Take these steps to prep your portfolio for volatility:
- Review your asset mix. Make sure you have enough cash on hand and your mix of assets—also known as asset allocation—is suitable for a pessimistic investing climate. Rebalancing while stocks are up is better than waiting until prices fall. Just know that you could miss some growth if stock prices keep rising.
- Check in with your risk tolerance. When the market is strong, it’s easy to forget how painful it is to watch your wealth decline. Think through downside scenarios and decide how you’ll respond. Doing this now can help you avoid knee-jerk decisions if stock prices fall.
- Trim excess spending. Widening the gap between what you make and what you spend improves your financial resilience. And, saving the excess to your emergency fund helps you prepare for the unexpected, so you won’t have to sell any investments prematurely.
For investors, volatility is both unavoidable and temporary. Being financially prepared to ride out the turbulence and remain positioned for growth on the other side is your best mitigation strategy.