Sunday Edition: War Headlines vs. Liquidity

Despite geopolitical chaos, markets remain driven by liquidity, not fear, with the upcoming FOMC decision set to shape the next big move.

📰 Market Mindset: Liquidity > Headlines

Despite the chaos in the headlines, the major indexes ended the week with moderate declines — driven by profit-taking, war-related volatility, and weak tech momentum into Friday's close:

• S&P 500: -1.95% – Still holding above the 50-day and 200-day MAs
• NASDAQ: -2.34% – Tech dragged down by NVDA, AMD, and software names
• Dow Jones: -1.65% – Defensive plays held up slightly better
• Russell 2000: -1.12% – Small caps showed relative strength
• VIX (Volatility Index): +17.8% – Spiked off geopolitical headlines
• Bitcoin (BTC): -0.8% – Flat to down after early-week strength; selling pressure Friday into weekend
• Gold (XAU/USD): +1.72% – Bid hard on Israel-Iran strikes, nearly hit new all-time highs
• Crude Oil (WTI): +3.4% – Spiked on renewed war risk and energy disruption fears

This week’s tape made one thing clear — while equities pulled back, safe havens like gold and oil caught strong bids. BTC initially ran but couldn’t hold the momentum into Saturday. For now, it's clear: headlines move emotion, but flows still favor assets with perceived safety and real-world demand.

🧾 What’s Ahead: Fed Week Incoming

This week is stacked with market-moving data, but all eyes are on Wednesday's FOMC meeting.

Retail Sales and Unemployment Claims will give insight into the health of the consumer and labor market, but it’s the Fed’s rate decision, projections, and press conference that will steer the market's next move.

With stocks still holding trend and liquidity themes dominating, a dovish tilt or pause language could fuel further upside, while any hawkish surprise could trigger a shakeout. Wednesday 2PM ET is the main event — expect volatility.

Now, let’s cut through the noise for a second.

On Saturday, we saw things escalate again in the Middle East — another flare-up between Israel and Iran, with drone strikes and missile salvos grabbing every headline. The fear machine went into overdrive. Social media lit up. Traders panicked. Futures wobbled on Friday but not nearly as much as anticipated.

But here’s the truth:

None of this is new. We’ve been here before — plenty of times. And we’ll be here again.

Let me remind you of something:

April 2020. COVID-19 was tearing through the world. Entire countries were shut down. More Americans died from the virus than in all modern wars combined.

And yet… That was the bottom. Not because the crisis was over — far from it — but because of one key driver:

👉 LIQUIDITY.

You want to know what actually moves markets? It’s not fear. It’s not war. It’s not even earnings. It’s how much money is sloshing around in the system.

Every time we’ve seen explosive rallies, it came after one lever was pulled:

• Tax cuts.

Look at history:

• 2002: Tax cuts → market surge.
• 2017: Tax cuts → S&P went vertical.

Anytime people get more money, they do two things: invest it or spend it. Both? Bullish.

Missiles can fly and politicians can rant, but if taxes go down or liquidity ramps, your portfolio is likely heading higher.

And let’s not forget:

👉 Attention spans are at an all-time low.

The world could be burning one day, and by Tuesday, we’re back to talking about earnings, AI, or the next shiny headline.

So when the news starts screaming panic, remember:

• We’ve seen this movie before.
• We don’t trade fear. We trade facts and flows.

Stay sharp. Stay grounded. -Carlos G. CEO, GAR Capital

“If your taxes are cut and there’s money in your pocket, you’re going to do something with it. Let’s position accordingly.”

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