What we learned last week:
“A ship should not ride on a single anchor, nor life on a single hope.” – Epictetus
Tariffs are back in the spotlight from Friday’s Supreme Court ruling, striking down Trump Administrations IEEPA tariff policy.
In a 6-3 vote, the justices ruled that the tariffs under the International Emergency Economic Powers Act (IEEPA) exceed the powers given to the president by Congress.
The scotusblog summarizes what specifically is impacted by this ruling:
The dispute that led to Friday’s opinion began April of 2025 when Trump issued a series of executive orders. One set of tariffs targeted products from China, Canada, and Mexico – which the Trump says, have not done enough to stop the flow of fentanyl into the United States. Another set, known as the “reciprocal” tariffs, imposed an initial tariff of 10% on imports from almost all countries and higher tariffs on products from dozens of countries – which Trump cited large trade deficits as an “unusual and extraordinary threat to the national security and economy of the United State.”
The court did not weigh in on whether or how the federal government should provide refunds to the importers who have padi the tariffs, estimate in 2025 at more than $200 billion.
In response to the news markets largely shrugged off the ruling and Trump announced that he would impose a temporary 10% global tariff under the Trade Act of 1974.
Turning to the economy and earnings, last week major indexes moved higher although key growth data showed signs of cooling and fourth-quarter earnings were mixed from one of the U.S. largest retailers.
A quick check on the economy last week came from fourth-quarter GDP which grew at just 1.4%, missing the Dow Jones estimate for a 2.5% gain. Additionally, a look at prices from personal consumption expenditures (PCE) showed consumer price growth remained elevated.
Lastly, we cover Walmart’s earnings reports because its performance was closely watched for signals on household spending trends. Although sales growth and profits beat estimates, the company offers cautious outlook “given the backdrop is still somewhat unstable.” Walmart CFO John David Rainey flagged indicators such as a hiring slowdown, poor consumer sentiment, and other debt burdens like student loans that could weigh on future results.
This week AI will be in focus as Nvidia earnings will be the highlight amongst concerns about capital spending for these large tech companies grow. Of course, Wall Street will also be resetting expectations after the Supreme Court ruling on President Trump’s tariff polices.
What’s Ahead This Week
Economic Events
- A relatively quiet week for economic data. Initial jobless claims and Producer Price index, a measure of inflation, will be important for markets
- Consumer Confidence Index, which fell to its lowest level in more than ten years in January reports for February on Tuesday.
- New home sales will be an important update for the sector struggling to grow.
Earnings
- As earnings begin to wind down there is one on deck this week that will have the attention of investors. Wednesday, Nvidia, the world’s AI leader, will report.
- Consumer companies, Home Depot and Lowes will have investors attention for their outlook on the consumer.
My goal is for you to feel educated and informed about variables we do and don’t have control over and find ourselves working within. I hope to do it in an informative and relatable way. As always, I value your relationship and planning objectives – my door is always open for conversation.
