Weekly Review: Tariffs and Crypto

This week, the market was originally in an adjustment phase, but a major news event broke over the weekend—the U.S. Supreme Court ruled 6:3 that the Trump administration's large-scale imposition of reciprocal tariffs under emergency economic powers lacked authorization and must be approved by Congress. This ruling weakens the existing tariff framework, with market estimates suggesting the effective tariff rate could drop from around 13% to about 6%.

Following the announcement, the stock market quickly rallied and closed higher after some volatility. However, it didn't surge all the way up because the market's concern isn't just the rejection of old tariffs, but whether a more aggressive alternative will be introduced. Uncertainty remains, so capital is naturally cautious.

In terms of sectors, companies highly reliant on global supply chains benefit the most. Retail giants like Walmart and Amazon see relief from import cost pressures, with profit improvements expected. The technology and hardware sectors also benefit, especially companies with complex supply chains and high tariff sensitivity, such as Apple and chipmakers. European and Japanese automakers, like Toyota, also benefit from lower cost expectations.

Industries previously protected by tariffs, such as steel and aluminum, face relative pressure and need to be wary of cheap imports returning. The financial sector is concerned that potential tariff refunds could widen the fiscal deficit and push up U.S. Treasury yields, causing turbulence for bank stocks.

In the short term, tech heavyweights remain the core directional force. Some leading stocks haven't stabilized above their 20-day moving average, and the overall index is still in a technical pressure zone. Two key variables in the latter half of the week are worth watching:

First is NVIDIA's earnings report, which directly impacts AI and chip sentiment;

Second is Trump's State of the Union address to Congress, which may touch on tariff alternatives, national security provisions, and tax refund stances, all of which could intensify sector divergence.

Roughly three scenarios are possible going forward:

If the speech is moderate and earnings are strong, the index may see a short-term surge;

If the policy stance is hawkish but not yet implemented, a period of consolidation is likely;

If a hawkish policy stance coincides with disappointing earnings, another decline is possible.

Overall, until the alternative policy is clarified, the sustainability of the rally is questionable. There's a short-term rebound, but the medium-term outlook leans towards consolidation, with the trend still awaiting confirmation.

On the crypto front, White House negotiations regarding stablecoin yields are still progressing. While no final agreement has been reached, constructive progress has been made. If a draft is formed by the end of February and legislation is advanced before April, it would constitute a phased positive. However, before it actually enters Senate voting, Bitcoin is likely to remain range-bound.

Currently, there's significant institutional cost pressure in the $75,000 to $80,000 range, and selling pressure from unwinding positions may emerge when approaching it. Short-term trading will likely focus on range-bound games, with exchange-related stocks potentially showing more elasticity than the coin price itself.

Summary: The market's main themes still revolve around the path for tariff alternatives and stablecoin legislative progress.

This is a stage of variable games, not a trend confirmation stage. Rhythm is more important than direction. 📊

$Circle(CRCL.US)

$Coinbase(COIN.US)

$Robinhood(HOOD.US)