Last Week
The Supreme Court of the United States finally struck down the tariffs imposed by Donald Trump, curbing the administration’s use of emergency authority to impose sweeping trade levies without explicit congressional approval. The markets breathed a sigh of relief while bracing for the next chapter of trade disruptions as President Trump announced a 10% global tariff, later increased to 15%, by executive order. The law restricts those tariffs to 150 days. The common takeaway from our conversations with management teams across our portfolio is that the tariff headwind is lessening but not going away. Corporate profits should see a modest bump, while the government budget deficit will increase.
The economic data showed signs of cooling, as the Bureau of Economic Analysis reported that GDP expanded at a 1.4% annualized pace in the fourth quarter of 2025, well below the prior quarter’s 4.4% rate and under consensus expectations of 2.8%. Federal government spending dropped 16.6% during the quarter, reflecting the impact of the government shutdown. Most of that shortfall will be recovered in the first quarter; nevertheless, it was a very weak reading.
The corporate earnings season approached its conclusion with Walmart’s results in focus. The earnings were excellent, but the forward guidance called for slower growth in 2026, leading to a modest slide in the Company’s share price. It is worth noting that Walmart’s shares have returned 31% over the last 12 months, reflecting U.S. consumers’ healthy spending despite exceptionally low consumer confidence throughout 2025 and tariff headwinds.
The S&P gained 1.1%, while the Nasdaq Composite moved up 1.5%, and the Russell 2000 was 0.6% in the green. Advancing issues outnumbered declining issues by a 3-2 ratio, with the Technology, Industrial, and Consumer Services sectors faring the best. The Dollar bounced off its recent low, while Gold moved marginally higher and Crude Oil spiked over 5% on concerns over the threat of a U.S. attack against Iran (Congress has not approved, or even discussed, an attack). The bond market remained steady, with the yield on the 10-year Treasury inching up 3 basis points to 4.09%.
On the Chicago Sports scene, the University of Chicago Maroons basketball team continued its winning ways, with road victories over the Brandeis Judges on Friday and the N.Y.U. Violets on Sunday. The Bulls have lost 9 games in a row, but still have slim chances of being bad enough to get a top draft pick.
This Week
Investors will try to analyze the impact of the most recent tariff twists on different sectors. President Trump’s policies will also dominate headlines as it relates to a potential military strike against Iran and whatever else he has in store for his State of the Union address Tuesday night.
Earnings reports from Nvidia, Salesforce, and Intuit will be in focus as investors wrestle with the dynamics of AI capital expenditures and their returns.
On the economic data front, February consumer confidence figures are due Tuesday, while Friday brings January wholesale inflation numbers and the February Chicago PMI.
The stocks mentioned above may be holdings in our mutual funds. For more information, please visit www.nsinvest.com.