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Tariff Shock and Nvidia Earnings Collide — Markets Navigate a Week of Maximum Policy Uncertainty
Global equity markets are digesting one of the most volatile policy sequences in recent memory: a landmark Supreme Court ruling striking down Trump’s emergency tariff powers, immediately followed by a new 15% global levy under alternative legal authority — and all of this arriving in the same week as Nvidia’s fourth-quarter earnings, projected to show record revenue of $65 billion. Volatility across all asset classes is elevated.
Key Events Driving Global Markets This Week
Markets are navigating a collision of headline risks that is compressing risk appetite across multiple asset classes simultaneously. The sequence of events is historically significant and warrants careful analysis before evaluating individual index behavior.
The Supreme Court Tariff Ruling — A Constitutional Turning Point. In a 6-3 ruling on February 20, 2026, the U.S. Supreme Court ruled that President Trump exceeded his authority by using the International Emergency Economic Powers Act (IEEPA) to impose tariffs — finding that IEEPA does not authorise the President to levy import duties. The ruling invalidated the vast majority of the administration’s “reciprocal” and drug-trafficking-related tariffs, removing approximately $133 billion in collected tariff revenue from legal standing. The decision represents the most significant judicial check on executive trade power in modern U.S. history.
Trump’s Counter-Move: The 15% Global Tariff. Within 24 hours of the SCOTUS ruling, President Trump announced a new 10% global tariff under Section 122 of the 1974 Trade Act — a separate legal authority not covered by the court’s ruling — then escalated it to 15% the following day. Trump stated on Truth Social that he would raise the tariff to the “fully allowed, and legally tested, 15% level” effective immediately. The Section 122 tariffs carry a 150-day time limit unless extended by Congress, which analysts note is politically challenging given mid-term election dynamics. This legal ambiguity — is this truly “legally tested”? — is contributing to the uncertainty that markets are now pricing.
Asian Markets: Short-Term Relief, New Uncertainty. Asian equities initially rallied on the SCOTUS ruling as traders expected significant tariff relief. The Hang Seng surged over 2%, South Korea’s KOSPI reached record highs supported by technology stocks, and most regional markets closed higher as traders anticipated reduced tariff burdens. However, Trump’s subsequent escalation to 15% — announced within 48 hours of the initial rally — reintroduces uncertainty, particularly for export-heavy economies like South Korea and Japan.
Nvidia: The Week’s Other Market-Defining Event. Simultaneously, Nvidia is scheduled to report its fourth-quarter fiscal 2026 earnings this Wednesday. Analysts are projecting record revenue of $65 billion — a figure that reflects the sustained demand for AI chips. However, the stock is facing near-term headwinds, with reports that three senior Nvidia executives have offloaded over $105 million in shares since the start of the year. This combination of record expectations and management selling activity is creating a volatile pre-earnings setup. The result will function as a bellwether for the entire AI-driven tech rally and will have implications well beyond the semiconductor sector.
- Supreme Court IEEPA ruling (6-3) invalidates most of Trump’s tariff framework — largest judicial check on trade powers in modern history.
- Trump counters with 15% global tariff under Section 122 of the 1974 Trade Act — a temporary (150-day) measure requiring Congressional extension.
- Nvidia Q4 earnings Wednesday — $65B revenue expected; management insider selling of $105M+ creates cautious pre-report dynamics.
- Gold is receiving a genuine safe-haven bid — trading near $5,060/oz — confirming institutional risk-off positioning.
- Middle East geopolitical risks and potential oil market disruption remain secondary but active market concerns requiring monitoring.
- Section 232 sector-specific tariffs (autos, semiconductors) remain intact post-ruling — not covered by the SCOTUS decision.
U.S. Market Recap: Futures Under Pressure as Tariff Chaos Weighs
U.S. stock futures are trending lower this Monday as investors process the dual shock of the SCOTUS tariff ruling and Trump’s immediate escalation to a 15% global tariff. S&P 500 futures are down approximately 0.32%, Dow futures are off 0.40%, and Nasdaq futures are lower by around 0.51% as the market attempts to assess the net economic impact of the tariff regime change.
The current environment is defined by policy uncertainty rather than fundamental deterioration — corporate earnings season has broadly held up, and the labor market remains resilient as evidenced by the recent NFP beat. However, the combination of trade policy chaos and the upcoming Nvidia report is keeping institutional traders cautious and reducing the appetite for aggressive positioning ahead of Wednesday’s data.
DJIA — Technical
The index is hovering near short-term support, with momentum indicators flattening following recent volatility. Consolidation is likely to persist unless a decisive breakout above near-term resistance restores bullish traction. The 50-day MA is serving as the pivot level to watch.
DJIA — Fundamental
Trade policy uncertainty and mixed corporate earnings outlooks are the dominant sentiment shapers. The market is simultaneously assessing economic resilience — still positive — against the rising cost of policy disruption in manufacturing and supply chain-exposed sectors.
S&P 500 — Technical
The index remains within a broader long-term uptrend but is currently testing its 50-day moving average, a key dynamic support level. RSI is signaling cooling momentum after prior gains. A sustained close below the 50-day would shift near-term bias to cautious/bearish.
S&P 500 — Fundamental
Big-tech earnings trajectory, inflation expectations, and tariff developments remain the three primary catalysts. Nvidia’s report Wednesday will likely set the tone for the remainder of the week across technology-weighted indices. Tariff exposure varies significantly by sector.
Asian Market Recap: Tariff Relief Rally Met by New Escalation Risk
Asian equities advanced broadly in initial trading as markets responded positively to the SCOTUS ruling that struck down the majority of Trump’s tariff framework. The logic was straightforward: if the emergency tariff powers are invalidated, the effective tariff burden on Asian exporters — particularly in South Korea, Japan, and across ASEAN — falls significantly. This produced a sharp, sentiment-driven rally across the region.
The Hang Seng Index surged over 2%, supported by Chinese tech names that are benefiting from reduced U.S. tariff exposure and continued AI investment enthusiasm domestically. South Korea’s KOSPI reached record highs, powered by technology stocks including Samsung and SK Hynix, which are positioned as primary beneficiaries of both reduced tariffs and continued global AI chip demand. Other regional markets — including Australia’s ASX 200 and key ASEAN exchanges — also closed predominantly higher.
However, the subsequent announcement of the 15% Section 122 tariff introduces a new complication. For South Korea specifically, analysts note that exporters of automobiles — more than half of which go to the U.S. — remain subject to 25% tariffs under Section 232, which was not affected by the SCOTUS ruling. The rally in tech stocks may prove more durable than the relief across industrials and auto exporters, where meaningful tariff burdens persist.
European Market Recap: Tariff Relief Offset by New Policy Overhang
European shares are edging lower, weighed by renewed trade policy uncertainty following the tariff announcement. The STOXX 600 and Germany’s DAX are both registering modest declines, with the technology and industrial sectors underperforming amid elevated investor caution. The pattern reflects a European market that is unable to sustain gains in the absence of clear, stable trade policy clarity from Washington.
The European position is particularly nuanced: the EU had agreed to a 15% tariff under IEEPA as part of its trade deal, which was invalidated by the SCOTUS ruling. The new Section 122 tariffs at 15% effectively re-impose the same rate through different legal authority. For European exporters, the net change may be minimal — but the legal instability undermines business investment confidence and complicates forward planning for multinationals with significant U.S. exposure.
French President Macron hailed the court’s ruling as evidence of democratic checks and balances, while Germany’s Chancellor Merz expressed optimism about lower overall tariff burdens and signaled plans to present a “coordinated European position” in upcoming Washington talks. The EU Parliament’s trade committee has raised the possibility of freezing the EU-U.S. trade deal in response to the ongoing tariff chaos, adding another layer of policy risk for European equities.
FTSE 100 — Technical
The index is showing relative stability, supported by its higher weighting toward defensive sectors including energy, mining, and consumer staples — areas that tend to be less sensitive to tech-driven volatility. Upside momentum remains capped below recent highs, with the index rangebound.
FTSE 100 — Fundamental
Currency fluctuations — particularly GBP/USD dynamics — energy price movements, and global trade developments are the primary drivers for UK-listed multinationals. The FTSE’s commodity and energy weighting provides partial insulation against tariff-related tech selling. UK GDP data today will be closely watched.
Overall Strategic View: Week of February 21–28, 2026
Global equity markets are navigating maximum policy uncertainty — a rare condition where multiple high-impact catalysts are active simultaneously. The SCOTUS tariff ruling has fundamentally altered the legal architecture of U.S. trade policy, but Trump’s rapid escalation to a 15% Section 122 tariff demonstrates that protectionism remains firmly on the agenda by alternative legal means. The 150-day time limit on Section 122 tariffs introduces a Congressional extension deadline that will become a focal market event as the clock runs down.
Nvidia’s earnings Wednesday function as the counterbalancing upside catalyst. A strong beat with bullish guidance could shift sentiment meaningfully and trigger renewed AI-led buying. Against that backdrop, risk assets including equity indices are likely to remain volatile and range-bound until both catalysts resolve. Traders are advised to reduce position sizing around Wednesday’s report and monitor gold’s behavior as the real-time barometer of institutional risk appetite this week.
Key Economic Events: Week of February 21–28, 2026
The economic calendar is running in parallel with the geopolitical and corporate event risk — creating a layered schedule of potential market-moving catalysts. The combination of Nvidia earnings, U.S. consumer data, and European inflation data means this week carries an above-average volatility potential across multiple sessions.
| Day | Currency | Event | Market Impact |
|---|---|---|---|
| Monday | NZD | Retail Sales (QoQ) Q4 | Low — regional risk gauge |
| Tuesday | USD | CB Consumer Confidence (Feb) | High — retail sentiment in tariff environment; miss = risk-off acceleration |
| Wednesday | AUD | CPI QoQ & YoY (Jan) | Medium — global inflation narrative |
| Wednesday | USD / NVDA | Nvidia Q4 Earnings + Trump Speaks | Very High — dual mega-event; likely determines week’s direction for equities and crypto |
| Wednesday | EUR | German GDP (QoQ) Q4 | Medium-High — Eurozone recession risk assessment |
| Wednesday | EUR | Eurozone CPI (YoY) Jan | Medium-High — ECB rate path signal |
| Thursday | USD | Initial Jobless Claims | High — Fed cut timeline signal; upside miss supports equities |
| Friday | CHF | GDP (QoQ) Q4 | Low — safe-haven currency read |
| Friday | EUR | German CPI (MoM) Feb | Medium — Eurozone inflation trajectory |
| Friday | USD | U.S. PPI (MoM) Jan | High — upstream inflation; sticky PPI reinforces Fed pause |
