Tensions between the U.S. and North Korea may have cooled down, but President Donald Trump's domestic relationships and political agenda remain a hotbed of turmoil. The result is market volatility and renewed concerns that Trump is driving a wedge between himself and business leaders.

A flurry of economic data also grabbed headlines, showing that economic activity is humming even as the housing industry faces some hurdles.

Will Trump lose more advisers?

After protests in Charlottesville, Virginia resulted in a young woman's death and a nationwide aftermath, business CEOs began to flee the Trump administration, causing the president to disband two business councils. Trump's controversial statements about the white nationalist protest and opposition counter-protest — including remarks that "both sides" were at fault — drove many business officials and Congressional leaders to distance themselves from the president. On Thursday, Trump was forced to scrap plans for an infrastructure advisory council as business leaders responded negatively to his response to Charlottesville.

The Dow Jones Industrials had its worst day in three months on Thursday as doubts increased about Trump's ability to achieve his business-friendly agenda. Investors also began to question how long the president's senior advisers and cabinet members would remain in place, given the public outcry surrounding the Charlottesville protests.

Chief concern for many is the fate of Gary Cohn, the Wall Street financier and chief of the National Economic Council in the White House. Cohn is seen by many as a voice of reason in the White House and a potential successor to Janet Yellen as Federal Reserve chair. Others have wondered if Treasury Secretary Steven Mnuchin would leave his post. The White House put out statements Thursday to tamp down speculation, but questions remain due to the overwhelming public outcry over Charlottesville and the Trump team's response.

The controversy puts a new shadow on whether Trump can achieve his pro-business tax cuts, deregulation and infrastructure investment agenda.

Housing starts take a tumble

Homebuilding in the U.S. took a downward turn in July as housing starts declined 4.8 percent, falling short of analyst expectations, the Commerce Department said on Wednesday. Year-over year, housing starts fell 5.6 percent.

Homebuilders broke ground on 1.16 million new residential units instead of the 1.22 million that had been forecast. Despite searing demand for housing, building on new single-family and multi-family homes has slowed — with much of the stall attributed to the lack of skilled laborers available in the workforce and the rising costs of building materials. Building permits, which foreshadow future construction activity, also fell 4.1 percent.

The report tempers sentiment that the housing market was due for a rebound after shrinking during the second quarter. But let's not start bemoaning the state of the industry just yet.

Housing data is often volatile, unpredictable and subject to revisions. Plus, the heavy focus on constructing single-family homes and not apartments could illustrate that builders feel the economy can support homeownership, not just rentals, according to MarketWatch. On Tuesday, the National Association of Home Builders released a survey showing that sentiment among homebuilders is on the rise this month after falling to an 8-month low in July.

Retail sales surge upward

Also on the rise are American spending habits. Retail sales rocketed to 0.6 percent in July, buttressed by a strong demand for cars and luxury items, the Commerce Department said Tuesday. It was the largest gain since December 2016, and came after retail sales spent most of the year stooping to disappointing levels.

Since consumer spending accounts for about two-thirds of U.S. economic activity, this latest report shows that the economy is strengthening even as wage growth remains sluggish. That doesn't negate the fact that employers are steadily hiring, the economy is basking in its lowest unemployment rate in 16 years and consumers are more confident about making big purchases.

Housing market still not a bubble

Rick Sharga, executive vice president of online real estate company Ten-X, told Seeking Alpha that while housing prices have exceeded the 2006 peak, the country is not preparing to implode under the weight of another housing bubble. The reason: nine years of inflation that have prevented costs from surging to bubble-era levels.

A chart from Bloomberg on inflation-adjusted home prices shows that this year's prices match prices in the first half of 2004. Does that mean we're a year or two away from a bubble? Well, we have to take the growth rate into account.

Home prices grew at a rate of 7.5 percent or greater from 2002 to 2006, jumping as high as 16 percent at one point in 2005. Home prices today are growing at a rate of 6.5 percent a year. While that may not appear to be a significant difference, we still have some wiggle room before we reach bubble territory.

Fed minutes scant on timelines

Domestic turmoil may end up delaying more Federal Reserve rate hikes as investors made a flight to safety this week, slowing equity growth and rallying bonds.

The Federal Reserve released its minutes from its July meeting this week and gave few clues about future rate hike timelines. However, the minutes did appear to take a move dovish stance on inflation, dovetailing with the investor sentiment of uncertainty.

Fed officials also seem divided on how to unwind the low-rate policy of the past decade in this environment. The minutes, released Wednesday, show that some Fed officials wanted to defer action until inflation was back on track, while others who are more hawkish worried that waiting too long could cause the Fed to surpass its employment target and create instability in the market. Officials also did not divulge a timeline on when it will enact the plan to unwind its $4.5 trillion balance sheet, although the members agree that it needs to happen soon, possibly in September.

For months, market observers have speculated that the Fed will raise rates in December. The likelihood of that happening will remain in question as global and domestic turmoil keep markets guessing.

The expectations this week are that market volatility continues and domestic and geopolitical conflict remains in place. This will be detrimental to the economy, however, interest rates would likely move lower as investors move into Treasurys for safety.