Market snapshot: investors unsettled by tariff chaos

President Trump is at it again, a new round of tariffs causing further uncertainty on global stock exchanges. ii's head of markets has the latest.

23rd February 2026 08:21

by Richard Hunter from interactive investor

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A weekend of confusion may yet have revived the “sell America” trade, with Dow futures indicating lower as a result.

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Tariff developments have turned the situation into an unholy mess, prompting far more questions than answers. After the Supreme Court ruled against the President’s tariffs, the implications are far from clear. No reference was apparently made in the ruling as to whether the monies raised from tariffs so far would need to be repaid and, even if this is the case, whether the refunds would go to companies or the ultimate customer who will have suffered higher prices.

To further compound the confusion, the President immediately invoked a different Act and announced that he would impose a blanket 10% global tariff, which he raised to 15% the following day. This brings another level of uncertainty given the trade deals which are already in place, although spokespeople from the White House implied that these would remain in place, which seems to contradict the Supreme Court ruling.

The initial market reaction to the ruling was positive, lifting the likes of Amazon.com Inc (NASDAQ:AMZN) and The Home Depot Inc (NYSE:HD) who in theory could benefit from tariff refunds. However, as the weekend events unfolded, sentiment has turned and the current indication is that the main indices will reverse any such gains when trading resumes later.

Investors certainly had a full agenda on Friday, with any tariff news coming on the back of two important economic releases. US GDP increased by just 1.4% for the fourth quarter, below estimates of 2.5% and sharply below the 4.4% advance in the third quarter. The government shutdown was largely to blame for the slowdown, although by implication the number could bounce back strongly in the first quarter.

At the same time, the Federal Reserve’s preferred measure of inflation, the Personal Consumption Expenditures index, rose from 2.8% to 3% at the core, showing that higher prices remain away from the 2% target with some tariff induced inflation potentially lingering. Thus, despite any slowdown in growth, there seems little reason for the Fed to move for the time being, even if investors are still anticipating two interest rate cuts this year.

As if there were not enough for investors for ponder, this week brings a further examination of the AI trade as NVIDIA Corp (NASDAQ:NVDA) reports earnings, alongside the usual sky-high expectations which the group attracts. In the meantime, the main indices have had mixed fortunes in the year to date, with the Dow Jones posting a gain of 3.3% and the S&P500 just 0.9%, while the Nasdaq has succumbed to a 1.5% decline.

UK markets struggled to react positively to the news over the weekend, although the subsequent spike in the gold price provided some relief through rises for the likes of Fresnillo (LSE:FRES) and Endeavour Mining (LSE:EDV), while the confirmation of a £200 million share buyback programme lifted JD Sports Fashion (LSE:JD.). Less positively, the data-related AI trade was back in focus, dragging on the likes of Sage Group (The) (LSE:SGE) and the London Stock Exchange Group (LSE:LSEG), ahead of its final results later in the week.

Even so, the losses were contained and did little initial damage to the progress which the main indices have made in the face of global uncertainty and renewed investor interest. The FTSE250 remains ahead by 5.2% so far this year, while the 7.5% gain for the FTSE100 is further proof of the primary index increasingly being viewed as a stable, defensive and undervalued investment destination.

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