“I am not young enough to know everything.”
-Oscar Wilde
Here’s what you need to know this week:
- Stocks post a slight gain, continuing their rangebound trend
- Tariffs, Iranian tensions and a government shutdown add to an uncertain market landscape
Rangebound
Stocks slightly rose last week as investors continue to grapple with the impacts and implications of artificial intelligence. Markets have been unusually volatile as A.I. advancements have impacted an ever-growing range of industries and investors are unsure as to whether these impacts will be a boon or a hindrance to existing companies. This has caused the major indices to post fairly dramatic daily swings while also not really going anywhere:
As you can see, the S&P 500 has experienced multiple steep drawdowns and equally steep rebounds this year but has stayed within 1.5% of 6,900 the entire year. This is typical of markets fraught with uncertainty, and between A.I., tariffs and Iran (more on these below), there is plenty of uncertainty to go around right now.
In other news, the Personal Consumption Expenditures (PCE) report for the month of December released on Friday. The PCE report is the Federal Reserve’s preferred measure of inflation and December’s report showed monthly inflation at 0.4% and annualized inflation at 2.9%[1]. Core PCE, which strips out food and energy prices, printed at 0.4% monthly and 3.0% annualized; both annualized numbers are decently close to the Federal Reserve’s long-term target of 2% but have also risen since President Trump’s tariff plan was announced in April:
This light rise is not cause for concern yet, but the return of tariff uncertainty may place more upward pressure on prices.
Busy Days
The last week or so has seen three new market catalysts enter the frame. The first is a partial government shutdown beginning on February 14th. This partial shutdown is an extension of the shutdown that lasted a couple days at the start of February and centers on the dispute over ICE officers in Minneapolis. Democrats are refusing to support more funding for the Department of Homeland Security without reforms to ICE procedures and Republicans do not have enough votes to pass the funding bill without a few Democratic defectors.
The second issue is tensions with Iran. The Trump administration has been threatening military action against the Iranian regime and have built up a significant military presence surrounding Iran:
No official action has been taken yet, although Senator Ted Cruz (R-TX) told CNBC that he believes “limited strikes” are likely in a matter of days[2].
The third issue is the return of tariff uncertainty. On Friday the Supreme Court struck down President Trump’s sweeping tariff plan announced on April 2nd last year, asserting that only Congress has the power to enact taxes and the tariffs are a form of tax. The decision was split 6-3 with Justices Kavanaugh, Thomas and Alito dissenting[3]. President Trump immediately excoriated the decision and vowed to re-implement the tariffs using other measures.
The next day President Trump announced that he will invoke Section 122 of the Trade Act of 1974, which allows the president to enact tariffs up to 15% for up to 10 days[4]; the tariffs officially go into effect today. Trump and his legal team have also floated ideas on enacting additional tariffs but will likely need Congressional approval. Markets rose on the news that the “Liberation Day” tariffs were struck down and fell on the news of the new tariffs, continuing the market’s trend of disliking the President’s tariff plan. Markets have been impressively resilient in the face of the uncertain landscape so far this year, and a positive resolution on one or more fronts may be enough to break stock prices out of their current range.
What Else
- Violence erupted across Mexico after the Mexican government killed “El Mencho”, the most-wanted cartel leader in the country
- An armed man was shot and killed by Secret Service at Mar-A-Lago after intruding into the private residence; President Trump and his family were not present
- The most powerful blizzard since the 1970s has hit the American Northeast, burying multiple states under 2-5 feet of snow and impacting more than 35 million Americans
- The Russian-Ukrainian war passed its fourth anniversary and now enters its fifth year with no end in sight
- Norway led the 2026 Winter Olympics with 18 gold medals and 41 total; the US finished second in both categories with 12 gold medals and 33 total
What We’re Reading
Can birdwatching improve your brain? A new study from the Rotman Research Institute showed that expert birdwatchers suffer less cognitive decline as they age and enjoy denser gray matter. Click below to learn more and decide if it’s time to dust off your old binoculars:
What’s Happening Downtown
The Civic Center Music Hall is hosting Classical Mystery Tour, one of the premier Beatles cover bands this weekend. There will be a show on Friday and Saturday, each show will begin at 7:30 PM and tickets start at $24. Click below to learn more and to purchase your tickets:
To read more from our blog, click here
Written by: Kane Ogle, CFP®
Steve Beck, Kane Ogle, CFP®, Amber Eduvigen, CFP®, Cale Olbert, CFP®, Brett Valentine, CFP®, Brandon Ingerson, Bill Daniel, Sam Postich, Jenni Hess
Sources: [1] Reuters [2] The Hill [3] Bloomberg [4] Bloomberg