Summary of Trump's Speech and Market Reactions

In a recent article by Aaron Hill, the focus is on the aftermath of US President Donald Trump's State of the Union address, which lasted nearly two hours. The address highlighted an economic recovery and record stock market highs, but the key market focus was on tariffs following a Supreme Court decision that struck down Trump's reciprocal tariffs.

Key Highlights from Trump's Address

• Trump referred to the Supreme Court's decision as "unfortunate" but assured that existing trade deals would remain intact under alternative legal authorities.
• He invoked Section 122 to implement a 10% global tariff, which could potentially rise to 15%.
• Despite the uncertainty, Trump expressed confidence that most trading partners would honor current trade agreements.

Market Performance

Following the address, the stock market saw a rebound, with the S&P 500 rising by 52 points (0.8%) to 6,890, the Nasdaq 100 increasing by 268 points (1.1%) to 24,977, and the Dow Jones gaining 370 points (0.8%) to 49,174. Consumer discretionary stocks led the gains, and nine of the eleven S&P sectors finished positively.

Currency and Commodity Updates

The USD Index showed modest gains but struggled to maintain a foothold under the 50-day SMA around 97.93. The Japanese Yen fell by 0.8% against the USD, influenced by comments from Japanese Prime Minister Sanae Takaichi regarding policy tightening.

In the commodities market, Spot Gold experienced fluctuations, finishing lower after reaching a high near US$5,249 but rebounding to nearly US$5,200. Oil prices remained stable, with traders awaiting developments from upcoming nuclear talks between the US and Iran.

Consumer Confidence and Inflation

The February US consumer confidence data indicated a slight increase to 91.2 from 89.0 in January, although sentiment remains fragile. Job availability showed improvement, but inflation concerns persisted among consumers.

In Australia, the January CPI inflation report surprised to the upside, with headline YY CPI data rising by 3.8%, prompting speculation about potential interest rate hikes by the Reserve Bank of Australia (RBA).

Federal Reserve Outlook

Federal Reserve officials indicated a cautious approach, emphasizing that rates are likely to remain on hold until more evidence of inflation returning to the 2.0% target is observed. The officials downplayed the economic impact of the Supreme Court's tariff ruling.

Nvidia Earnings Report

The market is also anticipating Nvidia's fiscal Q4 26 earnings report, which is expected to significantly impact market volatility due to the company's substantial influence on the S&P 500 and Nasdaq. Analysts are closely watching for signs of whether the AI infrastructure build-out is sustainable or merely a bubble.

Conclusion

The article encapsulates the current market dynamics influenced by Trump's tariffs, consumer sentiment, and the Federal Reserve's cautious stance, alongside the anticipation surrounding Nvidia's earnings report. Investors are advised to remain vigilant as these factors could lead to increased market volatility.