Market Update Summary - February 25, 2026
Overview
The North American markets experienced a mixed week, influenced by a recent Supreme Court ruling that deemed the Trump Administration's IEEPA tariffs illegal. This decision has raised concerns among traders regarding the potential economic repercussions, particularly with over $133 billion in duties potentially needing refunds.
Key Developments
Following the Supreme Court's ruling, President Trump announced new tariffs under Section 122, which allows for temporary levies aimed at balancing trade. These tariffs, initially set at 10% and raised to 15%, are set to last for 150 days, leading to speculation about further legal maneuvers from the administration.
Despite the reduction of tariffs on countries like Brazil and India, the U.S. Trade Representative confirmed that tariffs on China would remain, albeit with stricter legal enforcement. This has led to initial positive market reactions, but uncertainty has since clouded the outlook.
Market Reactions
U.S. equities, particularly the Nasdaq and S&P 500, have shown signs of recovery, while the Dow Jones has struggled. The Canadian TSX has outperformed, rising by 2.50% this week, and the Japanese Nikkei 225 has gained nearly 4.00%.
The U.S. Dollar has remained strong amidst the tariff uncertainty, testing key resistance levels around 98.00. The geopolitical tensions in the Middle East, particularly regarding U.S.-Iran talks, are contributing to this demand for the dollar.
Economic Indicators
Recent U.S. economic data, including a PCE inflation rate of 3.0% (above the expected 2.8%), has diminished expectations for Federal Reserve interest rate cuts. A series of comments from Fed officials suggest that a rate cut in May is now less likely.
For Canada, upcoming GDP data will be crucial, especially after recent softer CPI and retail sales figures. The Canadian Dollar has seen some outflows as traders await this data.
Conclusion
As the week progresses, traders are advised to monitor developments in the Middle East and the economic calendar closely, particularly the U.S. PPI data and Canadian GDP releases scheduled for Friday.