Market Report.
🗓️ Before we get into the details of a new chapter of international chaos, let’s start with the macro agenda for the week.
🌍 Top Weekly Risks: final Eurozone CPI, German Ifo, US PPI/Core PPI, Chinese plus PBoC Loan Prime Rate (Feb) and Japan January industrial production.
🏢 Of course, from the corporate world, one of the key events of the week, will be the presentation of results of the giant Nvidia.
📉 The market is already showing signs of uncertainty ahead of Nvidia’s earnings announcement on Wednesday, with European stock futures slipping 0.5%, S&P 500 futures down 0.8%, and Nasdaq futures declining 1%.
💰 Nvidia, the world’s most valuable company, is expected to post a 71% rise in earnings per share for the fiscal fourth quarter, on revenue of $65.9 billion.
⚖️ The U.S. Supreme Court struck down much of President Trump’s “reciprocal” tariffs that were imposed under the International Emergency Economic Powers Act. However, the President has quickly responded by: Announcing he will leverage a new authority, Section 122, to impose 10% tariffs globally, and then increasing them to 15% the next day.
📜 The White House has published a list of trade items exempt from the initial 10% tariff, but it’s unclear if those exemptions will apply to the new 15% rate.
🌐 The bill he is now using, Section 122, specifically prevents discrimination between countries, meaning the entire world must face the 15% tariff rate. This includes heavily sanctioned countries like Russia and North Korea, which were previously exempt from the initial tariffs.
⏳ The Section 122 authority only lasts for 150 days before needing Congressional approval, which Republican lawmakers are unlikely to provide given the unpopularity of tariffs.
💵 Importers are still paying the now-illegal “reciprocal” tariffs, as the U.S. Customs and Border Protection system has not yet been updated to remove the duty charges. Refunding the estimated $175 billion collected is expected to be a “mess.”
📉 This erratic policymaking and constant shifting of the goalposts is fueling a global “sell America” sentiment, as investors lose confidence in the stability and coherence of U.S. trade policy.
🌎 The ruling has already had geopolitical repercussions, with India delaying a planned trade visit to Washington to evaluate the implications. The European Commission has ruled out any changes in response to these actions.
🧾 The White House is claiming the effective tariff rates won’t change much and existing trade deals will stand, but it’s unclear how that can work given the previous tariff framework no longer exists.
🚫 Treasury Secretary Bessent has even threatened trading partners with embargoes if they don’t honor the previous trade deals, creating the bizarre prospect of the U.S. embargoing itself from global trade.
🌏 The global reaction to the chaos surrounding U.S. tariff policy has been quite negative: The “sell America” meme has been revived in early Asian trading, with the U.S. dollar and Wall Street futures declining in response.
📈 The two-year US bond has experienced nearly 2% volatility in 24 hours. Moving from a rapid rise to 3.54% in the fall to the current 3.47%, 7 bp.
🌍 International reactions to the US Supreme Court’s ruling on tariffs:
🇹🇼 Taiwan, home to the world’s leading chipmaker, says the new 10% tariff announced by Trump will have a “limited impact” on its economy.
🇫🇷 French President Macron said the ruling proves the benefit of having an effective rule of law.
🇬🇧 The UK government says it will work with the US to understand the implications, but expects its privileged trade position to continue.
🏭 British trade groups warn the ruling adds to uncertainty, and that Trump still has “other options” to retain tariffs.
🇨🇦 Canada’s trade minister says the ruling reinforces their position that the previous tariffs were unjustified.
🇨🇭 Swiss industry groups welcome the ruling but caution the administration could use other laws to “legitimize tariffs.”
📉 The U.S. economy slowed more than expected in the fourth quarter of 2025: Gross domestic product (GDP) rose at an annualized rate of just 1.4%, well below the expected 2.5% gain.
🏛️ The Commerce Department estimated the government shutdown, which ran through the first half of the quarter, subtracted about 1 percentage point from growth. For the full year 2025, the U.S. economy grew at a 2.2% pace, down from 2.8% in 2024.
🗣️ President Trump blamed the weak GDP number on the government shutdown, arguing it cost the U.S. at least 2 percentage points in growth.
📊 Underlying U.S. inflation, as measured by the core personal consumption expenditures (PCE) price index, published last Friday, increased more than expected in December, rising 0.4% compared to the forecast 0.3% gain.
📈 In the 12 months through December, core PCE inflation advanced 3.0%, up from 2.8% in November. This is one of the key inflation measures tracked by the Federal Reserve. Signs are pointing to a further acceleration in January, with estimates that core PCE inflation could increase by as much as 0.4% on a monthly basis, translating to a year-over-year gain of 3.1%.
🏦 The stronger-than-expected inflation data strengthens expectations that the Federal Reserve will not cut interest rates before June, as it continues to assess progress on its 2% inflation target.
Geopolitics.
🕵️ According to one of Epstein’s emails, Russia’s FSB alleges that former IMF chief Dominique Strauss-Kahn was jailed in the U.S. in May 2011 for discovering that all gold in the U.S. Bullion Depository at Fort Knox was missing or unaccounted for.
🏅 Strauss-Kahn grew concerned after the U.S. delayed delivering 191.3 tons of gold to the IMF, as agreed in 1978. The gold was intended to fund Special Drawing Rights (SDRs). Strauss-Kahn reportedly received evidence from “rogue CIA elements” confirming the gold’s disappearance. He attempted to leave the U.S. for Paris after raising concerns with U.S. officials.
🇲🇽 Civil war in Mexico due the internal wars with the cartels?
🔥 Mexico’s cartel landscape has reached a turning point following the killing of Nemesio Oseguera Cervantes, alias “El Mencho,” leader of the Jalisco New Generation Cartel (CJNG), on February 22, 2026. Once the country’s most dominant criminal organization, the CJNG’s future is now uncertain, leaving a dangerous power vacuum. Meanwhile, the Sinaloa Cartel remains mired in a brutal internal conflict between the “Los Chapitos” and “La Mayiza” factions, turning cities like Culiacán into war zones.
⚔️ The violence has spread across over a dozen states, with Guadalajara, Tijuana, and Manzanillo emerging as flashpoints for trafficking and bloodshed. The cartels’ control over strategic assets—from Pacific ports to the drug-producing “Golden Triangle”—fuels both their resilience and the government’s struggle to regain control.
🏛️ In response, President Sheinbaum’s administration has walked a tightrope, balancing Security Minister Omar García Harfuch’s intelligence-led crackdowns with the need to assert Mexican sovereignty amid escalating U.S. intervention.
🚁 Under former President Trump, the U.S. designated six cartels as Foreign Terrorist Organizations in 2025, ramped up covert drone strikes, and formed a new Counter-Cartel task force, while threatening economic leverage to force Mexican compliance. With El Mencho’s death likely to trigger further fragmentation and infighting, Mexico now faces a dual crisis: containing domestic chaos and managing an increasingly assertive U.S. stance.
⚔️ On the potential US-Iran conflict: US Congress could pass a War Powers resolution to prohibit the president from ordering strikes on Iran without their approval. This would change the legal calculus and send a strong political message, though Congress has been relatively muted in its reaction so far.
📜 The administration would need to make a much stronger case for immediate self-defense to legally justify strikes, rather than the more nebulous claims of collective self-defense with Israel used previously.
🏛️ The key question is whether the Trump administration will abide by the constitutional requirement to obtain congressional approval before initiating major military action against Iran, or whether it will attempt to circumvent those checks and balances.
Market View.
📉 US equity futures have resumed their pullback.
📊 E‑mini S&P 500 futures have fallen to around 6,885 points, while Nasdaq 100 futures have slipped towards the 24,900‑point level.
💵 The US Dollar Index (DXY) reached 98 on Friday, but uncertainty surrounding the judicial ruling on tariffs triggered a pullback to approximately 97.50. This led to renewed volatility in EUR/USD, which rebounded from 1.1750 to around 1.1820.
📉 US Treasury yields also declined. The adverse Supreme Court ruling initially pushed the 10‑year yield above 3.54%, but it has since retreated to around 3.47%, a move of roughly 7 basis points lower from the highs.
🇩🇪 In Europe, DAX 40 futures have fallen by more than 300 points since Friday, currently trading near 25,165 points. Euro Stoxx 50 futures proved somewhat more resilient, though they too have eased back to around 6,120 points.
🛢️ Spot Brent crude reached $72.20 per barrel on Friday, before pulling back to approximately $70.75.
🥇 Gold futures rallied sharply amid rising uncertainty, approaching $5,200 per ounce in recent hours, before easing slightly to around $5,158 per ounce.
₿ Finally, Bitcoin dropped below the $65,000 level, before staging a modest rebound to approximately $65,711.
