What matters today
1 Supreme Court strikes down Trump’s IEEPA tariffs 6–3 — Roberts: IEEPA “does not authorize the President to impose tariffs”; Gorsuch and Barrett joined liberals; Kavanaugh, Thomas, Alito dissented; invalidates reciprocal tariffs on 90+ countries and fentanyl duties on Canada, China, Mexico; ~$130–175B in refunds at risk; Trump called it “a disgrace,” says he has backup plan; Section 301/232/122 available but slower and narrower
2 Q4 GDP misses badly at 1.4%; core PCE rises to 3.0% — GDP expected 2.5–3.0%; shutdown shaved ~1pp; full-year 2025 GDP 2.2% (down from 2.8%); consumer spending slowed to 2.4% (from 3.5%); core PCE at 3.0% (exp 2.9%), highest in nearly a year; stagflation narrative building; savings rate fell to 3.6%
3 Trump “considering limited strike” on Iran; military ready by Saturday — 10–15 day deadline confirmed; IAEA board meets Mar 2; Poland urges citizens to leave Iran; USS Ford transiting toward Mediterranean; Iran threatens “decisive” retaliation against US bases; oil eased to ~$71 Brent on “limited” framing
4 Canada: SCOTUS ruling “good news but not the end” — 25/35% IEEPA tariffs on Canadian goods invalidated but steel/aluminum/lumber tariffs remain (Section 232); CUSMA mandatory review July 1; MEI: “impact on Canada remains limited; we’re not out of the woods yet”; 98% of Canadian exports covered by CUSMA
01
Market Snapshot
Intraday Feb 20
INDEX / PAIR
LEVEL
DAY CHG
SIGNAL
S&P 500
~6,880
+0.3%
▲ SCOTUS rally reversed GDP selloff; weekly +0.7%
Nasdaq
~22,800
+0.5%
▲ Tech biggest SCOTUS beneficiary; snapping 5-week losing streak
Dow
~49,400
+0.2%
▲ Recovered from −200pt GDP-driven selloff
TSX Composite
~33,500
+0.5%
▲ IEEPA tariffs on Canada struck down; near record
10yr Treasury
4.08%
+5bp
▲ Yields rose post-SCOTUS; hot PCE reinforces Fed hold
DXY (USD)
~97.9
flat
▶ Eased post-SCOTUS tariff ruling; near 4-year lows
WTI Crude
~$66.00
−0.6%
▼ Eased on “limited strike” framing; still near 2026 highs
Gold
~$5,044
+1.3%
▲ Geopolitical hedge; stagflation fears; above $5,000 again
Bitcoin
~$67,900
+1.9%
▲ Risk-on post-SCOTUS; macro uncertainty hedge
02
Conflict & Stability Tracker
Critical
Supreme Court Strikes Down IEEPA Tariffs: Biggest Check on Presidential Trade Power in Decades
6–3 ruling: Roberts + Gorsuch + Barrett + 3 liberals. IEEPA “does not authorize the President to impose tariffs.” Invalidates reciprocal tariffs on 90+ countries and fentanyl duties on Canada/China/Mexico. ~$130–175B in refunds at risk; refund process punted to lower courts. Trump called it “a disgrace”; said he has a backup plan. Kavanaugh dissent warned of “mess.” Section 232 tariffs (steel, aluminum, copper) unaffected. Administration can reimpose via 301/232/122 but with more process, lower caps, and slower timelines.
Critical
Trump “Considering Limited Strike” on Iran; Military Assets in Place by Saturday
Confirmed 10–15 day ultimatum from yesterday’s Board of Peace. Friday: “I guess I can say I am considering it.” Bloomberg: IAEA board meets Mar 2 — deadline aligns. USS Ford transiting toward Mediterranean; USS Lincoln on station; 50+ jets deployed. Pentagon: “full forces” in place by mid-March. Iran threatens “decisive” retaliation against US bases. Poland urges citizens to leave Iran. Oil eased to ~$71 Brent on “limited” framing vs full campaign fears.
Tense
Stagflation Signal: GDP Misses Badly at 1.4%; Core PCE Rises to 3.0%
Q4 GDP 1.4% vs 2.5–3.0% expected (down from 4.4% in Q3). Government shutdown shaved ~1pp. Full-year 2025 GDP 2.2%, slowest since 2020. Core PCE rose to 3.0% (exp 2.9%), highest in nearly a year. Monthly +0.4% for both headline and core. Savings rate fell to 3.6% (lowest since Oct 2022). Consumer spending slowed to 2.4% (from 3.5% in Q3). Fed rate cut path further delayed; hold consensus reinforced.
Tense
US-Canada Trade: IEEPA Tariffs Struck Down But Steel/Aluminum/Lumber Remain
25/35% IEEPA tariffs on Canadian goods invalidated. But Section 232 tariffs on steel, aluminum, copper unaffected. CUSMA mandatory review July 1 with protectionist US administration. MEI: “impact on Canada remains limited.” Carney building EU–CPTPP trading bloc; $3.1B food affordability package. 98% of Canadian exports covered by CUSMA. House voted 219–211 (Feb 11) to end Canada tariffs; Senate pending.
Watching
Ukraine-Russia: Geneva Talks Concluded; Board of Peace Pledges $17B for Gaza
Trilateral talks ended; next round in Switzerland. Board of Peace inaugural meeting pledged $17B for Gaza reconstruction. Iran and Ukraine crises consuming parallel diplomatic bandwidth. EU €90B Ukraine loan approved. Epstein fallout continues: Wexner deposed, Andrew arrested in UK.
03
Fast Take
SCOTUSSupreme Court strikes down IEEPA tariffs 6–3 in historic rebuke — Roberts: “does not authorize the President to impose tariffs”; Gorsuch and Barrett joined liberals; 170 pages of opinions; no president had used IEEPA for tariffs in its 50-year history; ~$130–175B in refunds at risk; refund process to Court of International Trade; Kavanaugh dissent: “mess”; Trump: “a disgrace”; Bessent: can recreate via 301/232/122; Section 122 limited to 15% for 150 days
ECONOMYQ4 GDP 1.4% — worst miss since 2023; core PCE at 3.0% — GDP expected 2.5–3.0%; Q3 was 4.4%; shutdown shaved ~1pp; full-year 2025 GDP 2.2% (down from 2.8%); consumer spending slowed to 2.4% (from 3.5%); core PCE 3.0% YoY (exp 2.9%), +0.4% MoM; headline PCE 2.9%; savings rate 3.6%; goods +0.4%, services +0.3%; Trump blamed shutdown; Fed cut path further delayed
IRANTrump: “I am considering” limited strike on Iran — confirmed 10–15 day deadline from yesterday; military “full forces” in place by mid-March; IAEA board meets Mar 2; Bloomberg: deadline aligns with UN vote; Iran to submit written nuclear proposal; Poland urges citizens to leave; Iran letter to UN: will respond “decisively”; IRGC chief: US bases “all within our range”; oil eased on limited framing
CANADASCOTUS ruling invalidates IEEPA tariffs on Canada but key duties remain — 25/35% fentanyl tariffs struck down; Section 232 steel/aluminum/copper unaffected; CUSMA review July 1; MEI: “impact limited; we’re not out of the woods”; Carney building EU–CPTPP bridge; 98% of exports covered by CUSMA; reimposition via other statutes possible but slower; TSX rallied
MARKETSStocks reversed GDP selloff on SCOTUS rally; Nasdaq leads at +0.5% — S&P +0.3%, Dow +0.2%; opened down on GDP miss, reversed on tariff ruling; retail ETF XRT +1.8%; Alphabet +2.5%; Floor & Decor, Crocs, Wayfair surged; Grail −47% on drug trial miss; Opendoor +19% on earnings beat; 10yr yield 4.09%; gold $5,044; Michigan sentiment 56.6 (miss); US PMI composite fell to 52.3
POLITICSBoard of Peace Day 2; Epstein fallout; congressional dynamics shift — $17B pledged for Gaza reconstruction; 5 countries committing troops; FIFA $75M; UK/Germany/France absent; Epstein: Wexner deposed, Andrew arrested in UK; House 219–211 tariff vote shows 6 GOP defections; Dems lead 47–40% on 2026 ballot; measles 800+ cases in 23 states; Milano Cortina Olympics closing this weekend
04
Developments to Watch
TRADE / LEGALSupreme Court Kills IEEPA Tariffs: The Most Consequential Trade Ruling in a Generation
The Supreme Court delivered the most significant check on presidential trade authority in modern history on Friday. In a 6–3 ruling authored by Chief Justice Roberts, the court held that the International Emergency Economic Powers Act “does not authorize the President to impose tariffs.” No president in IEEPA’s fifty-year history had ever used the law for this purpose until Trump.
The constitutional stakes were enormous. Roberts wrote that the administration had asserted “extraordinary power to unilaterally impose tariffs of unlimited amount, duration and scope” but pointed to no statute conferring that authority. Gorsuch and Barrett — both Trump appointees — sided with the three liberal justices. Kavanaugh, writing the dissent joined by Thomas and Alito, argued the law’s text authorises tariffs as a way to “regulate importation” and warned the ruling could create a “mess” with refunds.
The financial implications are staggering. IEEPA tariffs generated roughly $130 billion as of mid-December, with Cato Institute estimates suggesting $175 billion at risk of refunds once post-December collections are included. The refund process was punted to the Court of International Trade, setting up months of litigation. Companies had already been filing protective claims.
For businesses, the immediate relief is significant but temporary. The IEEPA tariffs represented about 60% of total tariff revenue, covering the “reciprocal” tariffs on 90+ countries and the fentanyl-related duties on Canada, China, and Mexico. But Treasury Secretary Bessent has repeatedly stated the administration can “recreate the exact tariff structure” using Sections 301, 232, and 122. The catch: Section 122 caps tariffs at 15% for 150 days; Sections 301 and 232 require fact-finding investigations that take months. Renaissance Macro’s Neil Dutta captured the political reality: “If Trump turns the trade knob back on, we get more uncertainty. If he doesn’t, he looks like a lame duck.”
ECONOMYThe Stagflation Print: GDP Slows to 1.4% While Inflation Accelerates to 3%
Friday’s data release was the worst-case scenario for Fed policy. Q4 GDP came in at just 1.4% annualised — dramatically below the 2.5–3.0% consensus and a sharp deceleration from Q3’s 4.4%. The government shutdown shaved approximately one percentage point, but even adjusted for that, growth decelerated meaningfully. Consumer spending slowed to 2.4% from Q3’s 3.5%, exports fell 0.9%, and the savings rate dropped to 3.6% — its lowest since October 2022.
Simultaneously, inflation moved in the wrong direction. Core PCE rose to 3.0% year-over-year (consensus 2.9%), the highest in nearly a year. The monthly reading of +0.4% for both headline and core was above the 0.3% forecast. Price pressures were broad-based: goods +0.4%, services +0.3%.
For the Fed, this is a paralysing combination. Slowing growth argues for rate cuts; rising inflation argues against them. The January FOMC minutes already showed officials in “no rush to cut,” and Friday’s data reinforces the hold consensus through mid-2026 at minimum. The next FOMC meeting on March 18 — potentially the first under a new chair if Warsh is confirmed — will carry extraordinary weight.
Full-year 2025 GDP of 2.2% was the slowest since 2020. Navy Federal’s Heather Long said the economy was “resilient despite many headwinds” but warned that repeated shutdowns are not harmless. The AI investment boom and wealthy consumer spending remain the key supports, but the foundation is narrowing.
SECURITY / GEOPOLITICSIran Countdown Day 2: Trump Considers Limited Strike as IAEA Meeting Looms
The Iran crisis entered its second day of explicit countdown on Friday. Trump confirmed he is “considering” a limited military strike on Iran, a significant escalation from yesterday’s 10–15 day ultimatum. Bloomberg reported that the deadline aligns precisely with the IAEA board meeting on March 2, where diplomats are expected to weigh a new censure resolution that could refer Iran to the UN Security Council.
The military picture is evolving from threat to operational readiness. A senior official told NPR that “full forces” needed for potential strikes are expected to be in place by mid-March. The USS Gerald R. Ford is transiting toward the eastern Mediterranean; the USS Abraham Lincoln remains on station. However, US troops have not yet received a target list, a sign Trump has not “pulled the trigger” according to CNN sources. Options range from targeted nuclear site strikes to a sustained weeks-long campaign to potential regime-change operations.
Iran is not backing down. A letter to the UN Secretary-General warned of “decisive” retaliation against US bases. The IRGC chief stated that American military assets are “all within our range.” Yet there is a diplomatic thread: Iran has agreed to draw up a written proposal addressing US concerns from this week’s Geneva talks. Kushner and Witkoff remain “hopeful” about a deal.
Oil markets are parsing the signal. Brent eased to ~$71 on the “limited” framing — a far cry from the $85–100 implied by a full Hormuz disruption. But the risk remains asymmetric: a limited strike could still trigger retaliation that closes the strait.
TRADE / CANADACanada Wins the Battle, Not the War: SCOTUS Relief Is Partial and Temporary
The Supreme Court ruling is genuinely good news for Canada — the 25% (later raised to 35%) IEEPA tariffs on Canadian goods, imposed under the fentanyl emergency declaration, are now invalid. But the Montreal Economic Institute captured the nuance precisely: “While today’s ruling is great news for free trade around the world, its impact on Canada remains limited; we’re not out of the woods yet.”
The limitations are structural. Section 232 tariffs on steel, aluminum, and copper remain in effect — these were imposed under different legal authority and were not challenged. Softwood lumber duties, a perennial irritant, also continue. And the administration has explicit backup plans: Bessent has said he can “recreate the exact tariff structure” through alternative statutes, though the process would be slower and more constrained.
The strategic clock is ticking. CUSMA enters its mandatory review on July 1, 2026, with a protectionist US administration that has repeatedly talked about dismantling the agreement. Trump has threatened 100% tariffs if Canada “makes a deal with China.” Carney is hedging through his EU–CPTPP trading bloc initiative and the $3.1 billion food affordability package, but the fundamental vulnerability remains: 75% of Canadian exports go to the United States, and no alternative market can replace that volume in the near term.
MARKETSMarkets Stage Intraday Reversal: SCOTUS Rally Overpowers GDP Shock
Friday produced one of the most dramatic intraday reversals of the year. Futures sank premarket on the GDP miss and hot PCE print, with the Dow falling 200 points at the open. Then the SCOTUS ruling landed and everything flipped. The S&P 500 climbed ~0.3%, the Nasdaq gained ~0.5% (on track to snap its 5-week losing streak), and the Dow recovered to +0.2%.
The beneficiaries were exactly what you’d expect. Tariff-exposed sectors led: the retail ETF XRT jumped 1.8%, with Floor & Decor, Crocs, Abercrombie & Fitch, and Wayfair surging. Alphabet gained 2.5%, on pace for its best day in three months. Wedbush’s Dan Ives called it “a net positive for tech” with $133.5 billion in potential refund relief improving supply chain visibility. The S&P 500 is on pace for a 0.7% weekly gain; the Nasdaq set to snap a five-week losing streak.
But the reaction was muted relative to expectations. JPMorgan had predicted a 0.75–1% initial pop if tariffs were struck down and replaced. The smaller-than-expected move reflects market awareness that reimposition is likely. US PMI data also disappointed: composite fell to 52.3 (from 53), manufacturing to 51.2 (from 52.4). Michigan consumer sentiment missed at 56.6. The combination of slowing growth, hot inflation, and tariff uncertainty leaves the market in a defensive posture despite today’s gains.
05
Sovereign & Credit Pulse
COUNTRY
KEY DEVELOPMENT
CREDIT SIGNAL
United States
SCOTUS struck IEEPA tariffs; GDP 1.4%; core PCE 3.0%; PMI fell
Stagflation risk rising; Fed hold reinforced; $130–175B refund liability; fiscal revenue hit
Canada
IEEPA tariffs invalidated; 232 tariffs remain; CUSMA review July 1
Partial relief; structural trade vulnerability persists; 100% tariff threat if China deal
Iran
Trump “considering limited strike”; IAEA board Mar 2; military in position
Extreme conflict risk; oil asymmetric upside; Hormuz closure still possible
China
IEEPA tariffs struck down; 145% reciprocal rate invalidated
Section 301 tariffs (first term) remain; reimposition likely via 301; trade relief temporary
Mexico
25% IEEPA fentanyl tariff struck down; CUSMA under review
Near-shoring momentum may slow; auto supply chain recalibration
06
Key Players & Quotes
Chief Justice John Roberts (US Supreme Court) — Authored 6–3 majority: IEEPA “does not authorize the President to impose tariffs”; “telling that in IEEPA’s half century of existence, no President has invoked the statute to impose any tariffs”
Donald Trump (US President) — Called ruling “a disgrace”; said he has backup plan; on Iran: “I guess I can say I am considering” a limited strike; blamed GDP miss on “Democrat Shutdown”
Justice Brett Kavanaugh (US Supreme Court, dissent) — Warned ruling could create a “mess” with refunds; said other statutes may “justify most (if not all) of the tariffs” with “a few additional procedural steps”
Neil Dutta (Head of Economics, Renaissance Macro) — “If Trump turns the trade knob back on, we get more uncertainty. If he doesn’t, he looks like a lame duck. The issue is more political than economic.”
Gabriel Giguère (Senior Policy Analyst, Montreal Economic Institute) — On Canada: “While today’s ruling is great news for free trade, its impact on Canada remains limited; we’re not out of the woods yet”
Dan Ives (Managing Director, Wedbush Securities) — On tech: “If the tariff ruling leads to refunds, we believe this would act as a net positive for tech with financial relief”; $133.5B in tariff revenue “up for grabs”
07
Regulatory & Policy Watch
SCOTUS IEEPA ruling — IEEPA tariffs on 90+ countries struck down 6–3; $130–175B in refunds at risk; Court of International Trade to handle refund process; administration can reimpose via Sections 301/232/122 but with caps and delays
Fed policy — Core PCE 3.0% reinforces hold; GDP 1.4% complicates; March 18 FOMC next; Powell exits May; Warsh nomination expected; tariff removal may ease inflation in coming months
Tariff refund process — Kavanaugh flagged “mess”; CIT to oversee; companies filing protective claims; no guidance on timeline; $130B+ at stake; Trump: refunds for foreign companies that invested here would be “a complete mess”
CUSMA review — Mandatory trilateral review begins July 1, 2026; protectionist US administration; Trump threatened to upend agreement; Canada’s 98% export coverage at risk; auto tariff restructuring in progress
Congressional dynamics — House voted 219–211 to end Canada tariffs (6 GOP defections); Senate pending; SCOTUS ruling may accelerate legislative action on tariff authority; midterm elections 2026
08
Upcoming Events
DATE
EVENT
SIGNIFICANCE
Feb 22
Milano Cortina Olympics closing ceremony
Canada/USA medal tallies; hockey results
Feb 23
Congress returns from recess
Tariff authority legislation; DHS funding; SCOTUS fallout
Feb 24
State of the Union address
Tariff response; Iran; Fed nominee; economic agenda post-SCOTUS
Feb 26
NVIDIA Q4 earnings
AI capex bellwether; tariff relief improves supply chain visibility
Feb 28
Rubio visits Israel re: Iran
Nuclear talks update; may signal military timeline
Mar 2
IAEA Board of Governors convenes (5 days)
Iran censure vote; aligns with Trump’s 10–15 day deadline
Mar 18
FOMC rate decision
Hold expected; core PCE at 3.0% delays cuts; potentially first under new chair
Jul 1
CUSMA mandatory review begins
Trilateral trade architecture at risk; Canada 98% export coverage
09
Strategic Assessment
February 20, 2026 will be remembered as the day the Supreme Court drew a constitutional line under executive trade power. The IEEPA tariff ruling is the most consequential check on presidential economic authority since the steel seizure case of 1952.The tariff landscape has fundamentally shifted — but not disappeared. The IEEPA tariffs represented 60% of total tariff revenue and covered the broadest, most aggressive duties. Their invalidation provides genuine relief for importers, consumers, and trading partners. But the administration’s insistence that it can “recreate the exact tariff structure” through alternative statutes means the threat is not extinguished — it is merely channelled into slower, more constrained, and more legally defensible pathways. The political calculus is acute: with midterm elections approaching, reimposing tariffs carries electoral risk, but failing to do so makes Trump look diminished. Renaissance Macro’s framing is exactly right: this is now more political than economic.
The stagflation signal is the sleeper story. Markets were understandably focused on SCOTUS, but the GDP/PCE combination is deeply concerning. Growth at 1.4% with core inflation at 3.0% is textbook stagflation. The shutdown accounts for some of the GDP miss, but consumer spending decelerated and the savings rate hit a two-year low. The Fed is trapped: cutting into 3% core PCE would destroy credibility; holding while growth decelerates risks overtightening. The SCOTUS ruling may ironically help the inflation picture by removing tariff-driven import cost pressures, but the lag is measured in quarters, not weeks.
Iran remains the existential wildcard. Trump’s shift from “10 days for a deal” to “I am considering a limited strike” in 24 hours is a significant escalation in rhetoric, even if military action has not yet been ordered. The alignment between Trump’s deadline and the IAEA board meeting on March 2 suggests the administration is building toward a decision point rather than bluffing. Oil’s relatively contained reaction reflects market pricing of “limited” action, but the asymmetric risk is massive: Iranian retaliation against US bases or Hormuz shipping would upend the global energy market.
For Canada, the ruling is relief without resolution. The IEEPA tariffs are gone, but Section 232 duties remain, CUSMA review looms, and the administration has explicit plans to reimpose. Carney’s diversification strategy is the right long-term play, but Canada remains structurally dependent on US market access in a way that no court ruling can fix.
Bottom line: The Supreme Court gave markets and the economy a reprieve, but not a reset. The three biggest risks — tariff reimposition through alternative statutes, stagflationary macro data, and an Iran military operation — are all still live. Position for volatility.
