It was a holiday shortened week, but it was jam packed with records, reversals and comebacks. There is no better place to start than by congratulating the USA women’s hockey team which won the gold medal in a comeback overtime victory yesterday. . As we’re wrapping up today’s note the Men’s team is leading Slovakia to advance to the gold medal game against none other than Canada. Bring it home boys!

That hockey game was supposed to be today’s main event but the Supreme Court’s 6-3 decision to strike down President Trump’s IEEPA tariffs threw a wrench in that plan. The decision was not unexpected as Polymarket odds for this outcome have been ~70% since the oral arguments in November (see below). The response to the tariff news within financial markets was reasonably muted. Equity markets moved higher, the USD weakened modestly after moving higher throughout the week and Treasury yields also ticked up a couple of basis points.

Today’s rally left major indices higher for the week and added to a string of volatile intraday sessions impacted by news flow and likely influenced by the fact that this week was options expiration. Despite the geopolitical uncertainty heading into the weekend the defensive and yield oriented sectors which have been outperforming pulled back this week. Consumer staples led to the downside falling 2.3%. Mega-cap heavy sectors - info tech, comm services and consumer discretionary sectors all ended up >1.5%. Financials and industrials were up a similar amount. Consumer discretionary is one of the sectors that is expected to see the most benefit from the tariff decisions.

After the Supreme Court invalidated the IEEPA tariffs on Friday, the analysis will ramp back up regarding the administration's response, refunds, current trade deals, etc., etc. President Trump will give his State of the Union Address on Tuesday. Nvidia, Salesforce Dell,, Snowflake, Home Depot and Lowe's earnings will be major events. It'll be relatively quiet for US economic data. January PPI on Friday will be among the more important releases, with more regional Fed surveys, Factory Orders, Home Prices and Consumer Confidence also published. There will also be a lot of Fed Speak. Overseas, mainland China reopens following this week's Lunar New Year holiday. Have a great weekend.