In a nearly two-hour long State of the Union (SOTU) address, President Donald Trump said in just a year under his administration, the country has achieved a never-before transformation and a “turnaround for ages.”
The Dollar Index (DX) futures continued to fall amid the SOTU address but has since then clawed back losses and were in green early Wednesday. The E-mini S&P 500 futures (ES) rose modestly, signaling an extension of gains from Tuesday. Commodity futures mostly firmed up despite the dollar’s strength.
The president restricted his speech mostly to domestic achievements, conditions and policy proposals, barring a brief mention of Iran and the hiked military contribution by North Atlantic Treaty Organization (NATO) allies.
Economy: Flaunting his achievements, Trump said core inflation was down to the lowest level in more than five years, gasoline prices have dropped to $2 or sub-$2 a gallon mark, and mortgage rates are lowest in four years.
The annual rate of the December price consumption expenditure (PCE) index was at 2.9% and that of the core PCE inflation was 3%. Both metrics are part of the personal income and spending report and are considered as Federal Reserve’s preferred inflation gauges. The January consumer price inflation report released earlier this month showed a deceleration in the year-over-year (YoY) rates of the headline CPI and core CPI inflation to 2.4% and 2.5%, respectively.
That said inflation continues to remain above the central bank’s 2% target and the two Fed officials who made public appearances on Tuesday flagged inflation as their biggest concern.
Trump also highlighted the $18 trillion in new investment his administration managed to attract in a year and rising domestic oil and natural gas production. He said more Americans are working today than at any time in the country’s history, with 100% of the new jobs created being in the private sector.
Turning his attention to the topic of tariff, the president said just when the U.S. was collecting billions of dollars in revenues from countries ripping it and trade deals were signed, the Supreme Court ruled against tariffs.
Healthcare: On healthcare, the president said big insurance companies availed government payments, enriching themselves. “I want to stop all payments to big insurance companies and instead, give that money directly to the people so they can buy their own health care, which will be better health care at a much lower cost,” he said.
Homeownership: Trump batted for homeownership by Americans, slamming “gigantic investment firms that bypassed inspection, paid all cash and turned those houses into rentals.”
While noting that he signed an executive order last month banning large Wall Street investment firms from buying up in the thousands, single-family homes, he said he has asked Congress to “make hat ban permanent because homes for people -- really, that's what we want. We want homes for people, not for corporations.”
401K for all Workers: Trump also said his administration will give private sector employees access to the same retirement benefits, matching contributions with up to $1,000 each year, so that all Americans can benefit from the rising stock market.
What’s the Next Trading Trigger? Artificial intelligence (AI) chipmaker Nvidia’s earnings due after the market closes on Wednesday will likely influence the near-term direction of the ES futures. Given the weighting of Nvidia in the S&P 500 Index, the underlying instrument of the ES futures, the derivative instrument could move in the direction of Nvidia’s stock.
Artificial intelligence (AI) chipmaker Nvidia’s earnings, due after Wednesday’s market close, are poised to shape the near-term trajectory of ES futures. Given Nvidia’s substantial weighting in the S&P 500 Index—the benchmark underlying the ES contract—any outsized move in the stock could translate into directional momentum for the broader equity futures market.
The consensus estimates call for earnings of $1.54 per share and revenue of $66.23 billion for Nvidia’s fourth quarter of fiscal year 2026, up from $0.89 and $39.33 billion a year ago.
Next up would be Thursday’s weekly jobless claims report and Friday’s producer price inflation report for January, along with a few Fed speeches.
