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Trump is reframing the Supreme Court tariff loss as a detour, not a derailment, as his team shifts the broad tariff base to Section 122 while keeping key sector and China-related tariffs intact.

Summary:

• Trump addressed tariffs during his SOTU address

• Supreme Court ruled IEEPA doesn’t authorise tariffs (Feb 20, 2026)

• White House pivoted to temporary global tariffs under Section 122

• Rate set at 10% for 150 days; administration working toward 15%

• Many other tariffs (Section 232/301) remain intact

• Economists question “balance-of-payments crisis” rationale, raising fresh legal risk

• Refunds and trade-deal durability remain live issues

Trump says tariffs stay despite Supreme Court setback — what changed, what didn’t

In his State of the Union address, President Donald Trump called the Supreme Court’s decision against his tariff program “very unfortunate,” but argued tariffs will remain in place, most countries want to keep existing trade deals, and Congress won’t need to act.

The backdrop is a major legal loss for the White House on February 20, 2026, when the US Supreme Court ruled that the International Emergency Economic Powers Act (IEEPA) does not authorise the president to impose tariffs. The ruling invalidated a broad swathe of the administration’s emergency-tariff framework and immediately raised questions about refunds, deal continuity and the legal durability of the wider tariff agenda.

Crucially, the administration moved quickly to keep a tariff “floor” in place. Within hours of the ruling, Trump issued a new order imposing a temporary global tariff under Section 122 of the Trade Act of 1974 — initially set at 10% for 150 days, with the White House subsequently working to lift the rate to 15% (the statutory ceiling). Section 122 is rarely used and is framed around “serious” balance-of-payments concerns; economists and legal specialists have questioned whether current US conditions meet that test, raising the risk of further litigation.

Trump’s claim that tariffs “remain in place” is also helped by the fact that many other tariffs are unaffected by the IEEPA ruling, including Section 232 sector/national-security tariffs and Section 301 trade-action tariffs. In parallel, the administration has indicated it can pursue additional tariff probes under other statutory authorities, supporting the view that the tariff regime is being re-routed rather than dismantled.

On trade deals, US officials have signalled that counterparties have not moved to walk away, but governments are watching closely for how the legal reset affects enforcement and timelines. The next market focus is whether Section 122 tariffs are maintained beyond the 150-day window (where congressional involvement can become relevant), and whether refund claims grow as court challenges evolve.

This article was written by Eamonn Sheridan at investinglive.com.

Generic and non specific comments on investment and manufacturing (manufacturing jobs are lower so far under Trump!).

He does mention lower drug prices.

Whole stack of stuff not of relevance to markets.

Excerpts provided by WSJ (gated).

His central economic policy has collapsed.

This article was written by Eamonn Sheridan at investinglive.com.

This is just a post for data, I’ll have details and analysis posted separately.

more to come

Background:

• Australia January CPI preview: core inflation steady, electricity lifts headline

This article was written by Eamonn Sheridan at investinglive.com.

The focus is the Australian CPI data for January:

• Australia January CPI preview: core inflation steady, electricity lifts headline

Trump will speak later. State of the Union speech. His centrepiece economic policy has completely collapsed. He’s scrambling to recover:

• Trump considers new Section 232 tariffs after Supreme Court ruling

This article was written by Eamonn Sheridan at investinglive.com.

• US February consumer confidence 91.2 vs 87.0 expected
• Richmond Fed composite index for February -10 versus -8 estimate
• BOE’s Bailey: Services prices inflation has not eased as much as we thought it would
• Home Depot’s Q4 earnings tell the story of a “frozen home environment”
• Fed’s Cook: AI transition could have profound implications but it’s too early to know
• Fed’s Collins: Recent jobs data has been promising
• US December CaseShiller 20-city house price index +1.4% vs +1.4% y/y expected
• Fed’s Goolsbee optimistic there can be more cuts this year but not until inflation lower
• Fed’s Bostic: even with rising productivity, the Fed needs to keep focus on inflation
• U.S. Treasury auctions off $69 billion of 2 year notes at a high yield of 3.455%

Markets:

• Gold down $69 to $5161
• WTI crude oil flat at $66.30
• US 10-year yields up 1.1 bps to 4.04%
• S&P 500 up 0.8%
• NZD leads, JPY lags

The Citrini rout yesterday had many of the hallmarks of a bottom in sentiment around software stocks. The panic yesterday looked like investors trying to get out at any price and it was followed up today by Anthrophic hosting a presentation that touted its partners, including some of the most-beaten up stocks over the past month. As a result, some of those names had big bounces like Thomson-Reuters up 11.5% and the software IGV ETF up 1.8%. Power and chip stocks were also strong once again and AMD rose 8% on a deal with Meta. It wasn’t all cheering though as EXPD and FICO (both AI exposed names) fell badly once again.

The FX market largely followed the mood in stock markets as the US dollar rallied early when stocks were flat but reversed lower as indexes climbed.

In terms of economic data, the improvement in the consumer confidence report was mostly ignored and Fed commentary still leaned heavily towards sitting on the sidelines for a month or two of data.

Traders are now looking toward Trump’s State of the Union speech and particularly any talk about attacking Iran in it.

This article was written by Adam Button at investinglive.com.

The US Treasury will auction 2 year notes. Below is some color from BMO:

Today’s $69 bn 2-year auction comes amid the bond-bullish tone-shift that has defined the last several weeks of price action in the Treasury market. While there isn’t a compelling outright discount with WI 2-year rates at 3.45%, there is a sizable curve-concession with 2s/10s back below the 100-day moving-average of 59.5 bp, and more than 15 bp off the steeps achieved a couple of weeks ago. After reaching as low as 3.38% last Tuesday, the back-up in 2-year rates off the local lows has coincided with a delaying of rate cut expectations into the second half of 2026. Still, the broader cutting bias remains intact with 2-3 cuts expected by year-end, and the market-implied terminal policy rate anchored near 3.0%. Of course, renewed global trade policy uncertainty has, once again, increased the market’s sensitivity to fresh tariff headlines, although that risk didn’t correspond to larger auction tails in 2025. Fundamentally, policymakers have refocused on the inflation side of the dual mandate and while that doesn’t necessarily make 2-year rates look attractive below 3.50%, we suspect that the magnitude of the curve concession is sufficient for a small stop-through at 1pm ET.

-Vail Hartman, Delaney Choi, and Ian Lyngen

Pros

• Consumer and business inflation expectations have eased substantially from the post-Liberation Day extremes from 2025.
• Households have continued to report a pessimistic outlook for the labor market and personal finances over the next year.

• Six of the last nine 2-year auctions stopped-through, and by an average of 0.8 bp.

• January’s 2-year auction was notably well-received, clearing an impressive 1.5 bp below the WI yield at the bidding deadline for the largest stop-through since August 2025.

• 2s/10s has pushed below 60 bp for the first time since January, leaving the curve ~15 bp off the early-February steeps.

Cons

• The Fed’s wait-and-see approach has been reinforced by the various risks and uncertainties linked to the recent tariff drama.
• The bar is higher for the next rate cut in light of the stabilization in the labor market, a dynamic that was clearly communicated from the Fed.
• Geopolitical concerns have kept energy prices near the local highs and with Iran remaining an open question, the stickiness of breakevens has a degree of fundamental support from the near-term balance of risks.
• There is an overhang of uncertainty whether Trump’s legal alternatives to impose tariffs will be able to completely replace the revenue stream provided by the IEEPA tariffs.
• With WI 2-year rates at 3.45%, the auction is expected to clear at the lowest yield since August 2022.

This article was written by Greg Michalowski at investinglive.com.

• High-yield 3.455%
• WI level at the time of the auction
• Tail 0.1 basis points versus 6 month average of -0.5 basis points
• Bid to cover 2.63X vs 6 mother average of 2.63X
• Dealers 9.81% versus 6 month average of 10.7%
• Directs 34.3% versus 6 month average of 32.0%
• Indirects 55.9% versus 6 month average of 57.4%

The auction was near the WI level. The Bid to cover was right on the 6 month average. The domestic buyers were marginally higher than the six-month average while the international buyers were marginally lower than the six-month average. The dealers were saddled with slightly less than what has been the average.

Overall, the auction grade: B

The US treasury will auction off 5 and 7 year notes tomorrow and Thursday respectively.

This article was written by Greg Michalowski at investinglive.com.

• Prior was the lowest reading since 2014 at 84.5

Details:

• Present situation 120.0 vs 113.7 prior
• Expectations 72.0 vs 65.1 prior
• Jobs plentiful 28.0% vs 25.8% prior
• Jobs hard to get 20.6% vs 20.8% prior

Among demographic groups, confidence on a six-month moving average basis ticked upward in February for consumers under age 35, which continued to be the most optimistic group. Confidence edged down for respondents 35 and older.

I find this something of a narrative violation:

The
Conference Board’s Consumer Confidence Index traced a dramatic arc
through 2025, defined by a steep erosion of sentiment tied to tariff
uncertainty, a brief mid-year recovery, and a renewed slide into
year-end and an 11-year low in January 2026.

Confidence
began the year at its highest point, then fell for five consecutive
months from February through June. The decline accelerated sharply in
March and April as tariff fears intensified. By April, the index had
plunged to 86.0 — levels not seen since the onset of the COVID pandemic —
with the Expectations Index cratering to 54.4, its lowest since October
2011. Nearly a third of consumers expected fewer jobs ahead,
approaching levels last seen during the Great Recession, and
expectations for future income turned negative for the first time in
five years. The decline cut across all age groups, income brackets, and
political affiliations.

May
brought a notable 12.3-point rebound to 98.0 — the largest monthly gain
in four years — fueled by the May 12 U.S.-China tariff pause. The
improvement was broad-based, though the Expectations Index remained
below 80, the threshold historically associated with recession risk.

That
recovery proved short-lived. Confidence resumed declining from the
summer onward, falling for five straight months through December. By
year-end, the index stood at 89.1, with the Present Situation Index
dropping sharply to 116.8 as views on business conditions turned
negative for the first time since September 2024. The Expectations Index
held at a weak 70.7, marking 11 consecutive months below the
recession-warning threshold of 80. Write-in responses continued to be
dominated by concerns about prices, tariffs, and politics, though
mentions of personal finances, immigration, and war increased into
December.

January
2026 brought a further 9.7-point plunge to 84.5 — driven by a
near-10-point drop in the Present Situation Index — suggesting the
cautious consumer mood that defined 2025 has carried firmly into the new
year.

This article was written by Adam Button at investinglive.com.

• Prior month -6

Details:

• Composite manufacturing index fell to -10 in February from -6 in January. Estimate was -8

• Shipments dropped to -13 from -5 last month

• New orders decreased to -9 from -6 lat month

• Employment edged down to -7 from -6 last month

• Local business conditions index declined to -15 from -8 last month

• Prices paid and received growth rates slowed in February to 6.52 from 7.06 last month

• Prices received also slowed to 4.25 from 4.58 last month

• Capital expenditures rose to -5 from -16 last month

• Services expenditures -20 versus -16 last month

• Firms expect further moderation in price growth over the next 12 months**

6 month forward expectations:

• Future local business conditions improved to 22 from 19

• Future shipments and new orders eased slightly but remained solidly positive. Shipments fell to 29 from 34. New orders fell to 35 from 36 las mont

• Employment expectations rose to 6 from 2 last month

The regional index remains in the negative for the index. The 3 month average has not been above the 0 level since 2022.

The Richmond Fed Manufacturing Index serves as a monthly “pulse check” for the industrial sector across the Mid-Atlantic region, covering Maryland, Virginia, the Carolinas, D.C., and most of West Virginia. It is a composite indicator derived from three key pillars: new orders, shipments, and employment levels. A reading above zero indicates expansion, while a reading below zero signals contraction. Because this district represents a diverse slice of American industry, the index is widely watched by economists and investors as a “canary in the coal mine” for the broader U.S. manufacturing economy, often providing early signals of shifting demand or supply chain trends before national data is released.

This article was written by Greg Michalowski at investinglive.com.

Home Depot’s fiscal fourth quarter results paint a familiar picture: the American homeowner remains cautious, selective, and increasingly uncertain about the macro backdrop.

The retailer posted $38.2 billion in revenue for the quarter ended February 1, a 3.8% decline year-over-year — though roughly $2.5 billion of that gap is explained by a missing 14th week in the current fiscal calendar. Strip that out via comparable sales, and you get a modest 0.4% increase. Earlier today, the CaseShiller 20-city US house price index was up just 1.4% with the South particularly soft.

CFO Richard McPhail described a “frozen housing environment” that’s now persisted for three years with no meaningful thaw. He highlighted housing affordability and job security as worries for consumers. In terms of metrics, store transactions fell 1.6% year-over-year, even as average ticket rose 2.4%, suggesting fewer trips but slightly larger baskets when shoppers do show up, largely due to inflation.

Big-ticket transactions — those over $1,000 — edged up 1.3%, but McPhail conceded that some of that reflects “modest” price increases rather than genuine demand strength.

The good news is mortgage rates have come down to 5.99% on the 30-year fixed, matching the lowest level since 2022 but only marginally. In terms of guidance, McPhail said that 2026 looks like it will be no better than last year.

The lock-in effect remains a critical barrier. If you bought or refinanced at 3%, you’re not moving to take on a 6% mortgage unless you absolutely have to. And if you’re a first-time buyer, affordability ratios remain stretched to levels that simply don’t pencil for most households. The result is that housing turnover stays depressed.

Regarding tariffs, the company says it’s “still in the middle of analysis” on the latest proposed 15% global tariff, and that more than half of what it sells is domestically sourced. It’s also diversifying imports so no single foreign country represents more than 10% of purchases.

That’s prudent supply chain management, but it doesn’t eliminate the risk of further price increases being passed through to an already

Home Depot’s fiscal 2026 outlook calls for total sales growth of 2.5% to 4.5%, comparable sales ranging from flat to up 2%, and adjusted EPS roughly flat to up 4%. That’s not a company signaling a recovery.

The stock popped 3.4% on the earnings beat, and some bulls are pointing to spring selling season and moderating mortgage rates as potential catalysts. Maybe. But until housing turnover meaningfully picks up — and that requires both rates and prices to cooperate — Home Depot’s consumer-facing business remains in holding pattern territory.

This article was written by Adam Button at investinglive.com.

• Prior was +1.4%
• House price index +0.5% m/m vs 0.0% prior

Home price data from the FHFA:

• Prices +1.8% y/y vs +1.9% prior (revised to +2.1%)
• Prices 0.1% m/m vs +0.6% prior

The
US housing market’s deceleration has been the story for months now,
and the Case-Shiller 20-City Composite continues to tell it clearly. The
index rose just 1.4% year-over-year in November 2025, a marginal tick
up from October’s 1.3% gain but still hovering near multi-year lows in
terms of annual appreciation. The December reading is due out today and
is unlikely to shift the narrative.

Here’s how the trend has unfolded since September:

• September 2025: +1.4% y/y, the eighth consecutive month of easing and the slowest pace since July 2023
• October 2025: +1.3% y/y, the smallest annual increase since July 2023
• November 2025: +1.4% y/y, the first pickup in ten months but still near a two-year low

The regional picture remains the most interesting part of this data set, and it continues to show a stark divergence between the Midwest/Northeast and the Sun Belt. Chicago led all 20 metros for a second consecutive month with a 5.7% annual gain, followed by New York at 5.0% and Cleveland at 3.4%. On the other end, Tampa posted a 3.9% decline, marking its 13th straight month of falling annual prices. Former pandemic darlings continued to struggle, with Phoenix and Dallas both down 1.4% and Miami off 1.0%.

What’s particularly notable is that home price appreciation has been trailing consumer inflation, which eased to 2.7% in November. That means in real terms, home values have been declining over the past year — a quiet but meaningful shift for homeowners who’ve grown accustomed to double-digit appreciation.

This article was written by Adam Button at investinglive.com.

• Fed’s Bostic: even with rising productivity, the Fed needs to keep focus on inflation
• Macro and geopolitical risks keep a lid on the Nasdaq: What’s next for the market?
• Australian Dollar in the spotlight ahead of the monthly CPI report. What’s next?
• Dollar may yet benefit from further US-Iran geopolitical escalation – BofA
• The Japanese Yen sinks as PM Takaichi signals opposition to further BoJ rate hikes
• China says it expects to hold trade talks with the US in the near future
• French business climate continues to struggle to start the new year
• Japanese yen falls on report that Takaichi voiced concerns to Ueda on BOJ rate hikes
• What are the main events for today?
• FX option expiries for 24 February 10am New York cut
• It is shaping up to be another rough week for cryptocurrencies
• Japan mulls revising liquidity-support JGB auctions to ease market pressure – report
• Swiss franc to stay favourable amid safe haven allure

The main highlight of the session was the Japanese Yen as the currency sold off across the board following a Mainichi report saying that Takaichi signalled opposition for further BoJ rate hikes at last week’s meeting with Governor Ueda. Her dovish views are of course well known, but the yen will continue to weaken as long as the rate hikes get pushed out. The economic data hasn’t been supporting a rate hike either.

Other than that, we haven’t got any notable news or data release. The US Supreme Court decision on Trump’s tariffs continues to reverberate across markets as uncertainty remains high, but overall nothing has really changed. At the margin, we could say that things improved a little bit as the average effective tariff rate fell.

We also had Fed’s Bostic speaking but he basically repeated the same old stuff. His focus remains on inflation which isn’t surprising given that he’s been holding a hawkish stance for several quarters. The most interesting comment was from Fed’s Waller yesterday as he mentioned that in case we see a repeat of the strong January’s NFP, he would be comfortable holding rates steady.

In the American session, we get the weekly US ADP jobs data and the US Consumer Confidence report. The weekly ADP was a market moving indicator only on the first releases, then it stopped being important. Nonetheless, the data has been showing significant improvement like many other US labour market data.

The US Consumer Confidence is expected at 87.1 vs 84.5 prior. The last report surprised to the downside. The Chief Economist at Conference Board wrote: “confidence collapsed in January, as consumer concerns about both the present situation and expectations for the future deepened. All five components of the Index deteriorated, driving the overall Index to its lowest level since May 2014 (82.2), surpassing its COVID-19 pandemic depths.”

This is a market moving report, especially when the deviations from expectations are large, but at this point it’s very unlikely to change anything for the Fed or the market.

This article was written by Giuseppe Dellamotta at investinglive.com.