Daily Market Summary – Feb 20th

Supreme Court Invalidates Tariffs

The U.S. Supreme Court delivered a landmark decision invalidating President Trump's sweeping tariff measures, nullifying broad import duties across multiple sectors and curbing unilateral presidential authority under the major questions doctrine. This ruling disrupted extensive trade plans, prevented fulfillment of numerous international deals, and sparked immediate market volatility with stocks rallying as major indexes like the Dow, S&P 500, and Nasdaq climbed higher. Businesses gained relief from anticipated cost hikes and supply chain strains, while Bitcoin surged in response and some consumer stocks advanced. However, the decision ignited a fierce $140 billion to $175 billion battle over refunds from prior Trump-era tariffs, escalating legal and political confrontations that threaten global trade relations, corporate finances, and market stability. Ports retained the ability to impose fees akin to tariffs, potentially raising shipping costs amid ongoing disputes, and companies like Walmart announced price increases to offset lingering trade tensions.

Trump Vows New Tariffs

In defiance of the setback, Trump attacked the Court and vowed to sign an executive order imposing a 10% tariff on all global imports, signaling persistent protectionism despite judicial limits. This move, coupled with other available tariff options, positions him to reshape trade dynamics, though it risks higher consumer prices, inflation pressures, and household budget strains. California Governor Gavin Newsom demanded federal refunds in light of the ruling, while the UK anticipated sustained favorable transatlantic trade. Internationally, Indonesia secured a 19% tariff deal exempting key commodities like palm oil, and negotiations advanced on U.S. purchases of Venezuelan oil alongside a finalized trade agreement with Indonesia reducing barriers on agriculture and minerals to bolster supply chains.

Weak Q4 GDP Growth

U.S. economic growth decelerated sharply in the fourth quarter of 2025, expanding at just 1.3% to 1.4% annualized—below expectations—amid weakening consumer spending and middle-class squeezes, with Trump attributing the slowdown to a government shutdown. The Fed's preferred PCE inflation gauge accelerated hotter than anticipated, holding at 2.6% and signaling sticky price pressures that dim prospects for imminent rate cuts, keeping monetary policy on hold. This data disappointed forecasts capping the year weakly, fostering investor caution and nudging S&P 500 futures lower amid rising geopolitical tensions. One year into Trump's second term, energy costs plummeted from deregulation while grocery prices stabilized post-supply chain adjustments, though housing and transport saw modest upticks, easing some inflation on households.

Iran Tensions Spike Oil

Geopolitical strains intensified as Trump warned Iran of a tight deadline for a deal, amassing U.S. military forces and prompting oil prices to hold near six-month highs or surge on supply disruption fears, which could spike gasoline costs and interest rates. A potential strike risks broader economic turbulence at a vulnerable juncture. Meanwhile, Venezuela aims to revive its oil sector post-regime change, ramping production from vast reserves to lure investment, while Repsol plans to triple output there after U.S. sanctions relief and a Trump ally partners with Russia's Novatek on an Alaska gas project. Trump's forthcoming high-stakes trip to China underscores evolving global energy trade resets.

Texas Data Center Boom

Texas solidified its trajectory as the world's data center hub by 2030, drawing over $200 billion from tech titans like Google, Microsoft, and Meta, fueled by cheap power, ample land, lax rules, and AI-cloud demand. Investors buzz over solid-state transformers as efficient grid upgrades aiding renewables, EV charging, and cost cuts amid surging energy needs. OpenAI advances AI-powered devices like smart speakers, with alumni spawning 18 startups in an 'OpenAI mafia' intensifying competition; Nvidia nears a $30 billion investment tie-up with OpenAI, pushes into CPU markets challenging Intel and AMD, and deepens India AI ecosystem bets. UAE's G42 teams with Cerebras for massive AI compute in India, while General Catalyst pledges $5 billion to Indian startups.

Wall Street Relocations Rise

Wall Street firms accelerated relocation from the U.S., ditching 'buy America' for 'bye America' amid regulations, taxes, and geopolitics, reshaping financial centers. Imports from Taiwan surpassed China for the first time in decades via supply chain shifts and semiconductor strength. Trump met Novartis CEO, announcing 11 new U.S. plants credited to tariff pressures, claiming they compelled domestic expansion. JPMorgan eyes a $5 billion debt deal backed by software assets to gauge investor interest. Penn-Wharton warns the tariff ruling jeopardizes $175 billion in revenue projections.

Commodities Rally Sharply

Commodity markets stirred with cotton, wheat, soybeans rallying sharply amid bullish grains surge, cocoa climbing on dollar weakness, coffee stabilizing, sugar rebounding post-ruling, and gold steady near highs or surging past $2,500/oz on safe-haven flows and Iran risks. Cattle and hog futures rebounded mixed, corn fluctuated on supply signals. Copper and crude oil prices swung with global trends. Eurozone PMIs accelerated robustly, manufacturing at a 44-month high, easing recession worries and hinting recovery.

Tech Layoffs and Challenges

Tech shifts included Meta scaling back metaverse for AI and social focus, reducing employee equity by 5%; Tesla launching cheaper Cybertruck options, cutting prices amid Autopilot liability upheld at $243 million, and losing appeal on a fatal crash verdict; Lucid laying off 12%; MicroStrategy stacking billions in Bitcoin as treasury reserve. Prediction markets like Kalshi won a key lawsuit, Netherlands banned Polymarket. Bitcoin and Ethereum posted decade-worst yearly starts with ETF outflows, though rebounds eyed.

Corporate Earnings Mixed

Corporate actions proliferated: Johnson & Johnson weighs $20 billion orthopedics sale; BofA notes AI doubts as double-edged; Netflix poised to thrive sans Warner Bros.; Del Taco shuttered Georgia sites; Franco Manca explores sale amid costs. Earnings snapshots dotted the landscape—strong from Comfort Systems, RingCentral, Five9, Celsius Holdings, SolarEdge, AMN Healthcare; misses or lines from Copart, Select Medical, Farmer Mac, DNOW, Cogent, RE/MAX; mixed for Tesla peers and utilities like Con Edison. Wall Street firms exiting U.S. amid pressures.

Currencies and Bonds Shift

Bonds and currencies fluctuated: dollar strengthened toward best weekly gain since October on scaled-back Fed cut bets; mortgage/HELOC rates hit lows since 2022. UK Chancellor gained fiscal headroom for budget flexibility, facing rate cut calls to avert recession. Argentina approved labor reforms, markets balanced post-Congress win; YPF bets big on Vaca Muerta shale. Freight robust, equity funds saw inflows easing AI fears. Trump policies clashed with rising utility bills despite energy dominance push; tax bracket shifts to hike retiree taxes in 2026.