The Tariff Story Isn't Over
A weekly look at what matters and how to trade it. (February 23rd)
Tariffs came off, oil went up, and the Fed leaned hawkish. Equities still finished last week higher.
US stocks managed a constructive week as the Supreme Court struck down President Trump’s sweeping global tariffs, removing a major overhang that had sat on corporate margins and consumer costs for months. The ruling triggered a broad Friday rally, particularly in trade-exposed retail and apparel names, and reframed the near-term growth outlook. Even dour data (softer GDP and firmer inflation) was overshadowed by the relief that a key policy risk had been neutralised, at least temporarily.
Earlier in the week, however, geopolitics kept markets on edge. Rising tensions between the US and Iran pushed crude to its highest level since August, lifting energy shares and reinforcing the bid in industrials tied to defence and infrastructure. Oil’s move was meaningful not just for equities but for macro expectations: it complicated the inflation narrative at a time when the Fed is already growing less comfortable with the pace of disinflation.
That tension came through clearly in the FOMC minutes. Policymakers signalled little appetite for near-term cuts and even entertained the possibility of hiking if inflation proves sticky. Rate markets responded by trimming year-end easing expectations, while the dollar staged its strongest week since October as short positioning unwound. The combination of firmer inflation prints and resilient labour data added weight to the Fed’s caution, even as growth showed signs of slowing at the margin.
The removal of tariff risk supports equities at the micro level, but macro crosscurrents (higher oil, a less dovish Fed, and geopolitical uncertainty) keep conditions tight. For now, policy relief has offset policy risk. Whether that balance holds will depend less on courtrooms and more on inflation data and energy prices in the weeks ahead.
Let’s get into the guide to trades moving markets, where things stand and where they may be heading.
“SCOTUS Rules Against Tariffs”
“Oil, Talks, and Strikes”
“The AI Trade Is Now the Index”
“Illiquid Assets Don’t Magically Become Liquid”