Trump’s speech and a rebound in risk

They say each day is a gift, but following these markets right now can feel like being hit by a freight train every morning.

Trump's SOTU address: Tariffs and defiance

US President Donald Trump’s recent State of the Union address lasted nearly 2 hours last night. As you would expect, Trump kicked off proceedings touting an economic recovery and Stock market all-time highs.

Tariffs were the key market focus following the Supreme Court’s 6-3 decision striking down Trump’s reciprocal tariffs last Friday. The President referred to the recent decision as ‘unfortunate’, yet he maintained that existing trade deals would remain intact under alternative legal authorities.

You will recall that Trump recently invoked Section 122 to implement a 10% global tariff, which came into effect on Tuesday. However, he did signal that this could rise to 15%. Interestingly, the President also noted that the majority of trading partners would continue to honour current trade deals given the threat of worse terms under the new authority. Time will tell with that one, I am afraid!

Market snapshot

In terms of market performance, we saw a rebound in Stocks and were green across the screen on Tuesday. Consumer discretionary led sector gains, while nine of the eleven S&P sectors finished positively. This followed AI company Anthropic’s livestream, which essentially outlined a more collaborative approach rather than a disruptive one. Frankly, the full economic impact remains speculative at this stage.

The S&P 500 was up by 52 points (0.8%) to 6,890, the Nasdaq 100 rose 268 points (1.1%) to 24,977, and the Dow Jones gained 370 points (0.8%) to 49,174.

In FX, the USD Index was modestly bid but continues to struggle to find a foothold under the 50-day SMA around 97.93. The JPY ended the session down 0.8% against the USD, a move powered by news that Japanese Prime Minister Sanae Takaichi had voiced hesitation about further policy tightening.

Across precious metals, Spot Gold finished the session lower after paring earlier gains from a high just shy of US$5,249. Ultimately, though, the yellow metal is up nearly 1.0% this morning, edging closer to US$5,200. Oil prices also continued to trade in a narrow range, following Iran's statement that it was ready to take the steps required to reach a deal with the US ahead of their nuclear talks on Thursday, in Geneva, Switzerland.

US Confidence ticks higher – Aussie CPI inflation surprises to the upside

The February US consumer confidence data from the Conference Board dropped yesterday and, in short, showed that sentiment modestly increased to 91.2, from 89.0 in January, but overall remains delicate. The report noted an improvement in job availability but maintained that jobs were ‘hard to get’. On the inflation front, price pressures remained top of mind for consumers; the report added that ‘consumers’ average and median 12-month inflation expectations were little changed but remained elevated’. 

Overnight, we also had the January Australian CPI inflation report, which will not be a pleasant read for policymakers at the RBA. Despite the AUD standing as one of the most overstretched currencies to the upside right now, the report triggered a strong move higher versus G10 peers this morning.

Headline YY CPI data rose by 3.8%, matching December’s reading and above the 3.7% median estimate, while MM data increased by 0.4%, below the 1.0% in the prior print but above consensus. The RBA’s preferred measure of inflation – trimmed mean CPI – also came in higher than expected at 3.4%. This marks the highest rate since late 2024 and is the seventh consecutive reading above the RBA’s 2-3% inflation target band. Given this, we have seen a modest hawkish repricing, with investors now assigning a 60% chance that the central bank pulls the trigger and hikes the cash rate again in May – prior to the release, it was about 54%.

Fed speak: Patience remains the watchword

We also had a number of Fed officials hit the wires yesterday, and the message was that the Fed is on hold, data dependent, and not in a rush.

Boston Fed President Susan Collins and Richmond Fed President Thomas Barkin signalled that rates are likely to stay on hold. Both want more evidence that inflation is heading back to 2.0% before supporting cuts, though Collins flagged later in 2026 as a possible window. Both also played down the economic impact of the Supreme Court's tariff ruling and Trump's subsequent counter-tariffs.

Three Fed officials are also on the slate today. Kansas City Fed President Jeffrey Schmid is the most notable watch, speaking directly on monetary policy and the economic outlook at the Economic Club of Colorado. Richmond Fed President Thomas Barkin joins a regional panel in Northern Virginia, while St. Louis Fed President Alberto Musalem takes part in a discussion on the Fed's regional role in Missouri. Barkin's appearance is worth monitoring, given his comments yesterday signalling patience on rates.

Nvidia earnings: The moment markets have been waiting for

Aside from the Fed speakers later today, the market’s radar will now firmly shift to Nvidia’s (NVDA) fiscal Q4 26 earnings report, expected to air after the market closes today. I am sure I do not need to say how important and widely watched these numbers are for the markets.

Given the Stock’s mammoth weightings in the S&P 500 and the Nasdaq, this report could heighten volatility across the major US benchmarks.

NVDA remains the bellwether for whether the AI infrastructure build-out is a sustainable structural shift or a front-loaded bubble. If the results disappoint, this could weigh on Stocks; conversely, if they surprise to the upside, this may underpin the market. As of writing, one-day implied volatility for the Stock is around a 6.0% move in either direction.

Technically, the Team here highlighted that since late November last year, the NVDA Stock has been ranging between approximately US$195.00 and US$170.00 on the daily scale. Basic chart studies tell me that, given the price left range support unchallenged and effectively found a mid-range floor from a low of US$179.18, this suggests buyers are gaining strength within this consolidation. With the Stock now shaking hands with range resistance and showing limited bearish intent in this area, a breakout to the upside could be on the table, a move that could help the Stock aim for all-time highs of US$212.19.