Investors are eyeing the State of the Union speech which could further fuel concerns

By Suzanne McGee and Laura Matthews

PROVIDENCE, Rhode Island/NEW YORK, Feb 24 (Reuters) – President Donald Trump’s State of the Union address on Tuesday evening hits a high point for investors, driven by market turmoil in recent months and a desire for stability.

Days after the Supreme Court struck down Trump’s tariffs on emergency powers, market participants are preparing for a speech that could affect policies that could move the market, from trade to imports to Iran.

The stock market during Trump’s second term has been volatile as investors react to the Republican push to fix US trade relations.

While the S&P 500 has gained 13% in the 400 days since Trump’s inauguration in January 2025, the benchmark has yet to rise at all in 2026 as Wall Street eases international stock markets and the dollar trades near a 2022 low.

“As winter storms in the Northeast continue to add piles of snow to the roads, I fear this speech will add to the anxiety levels in the market,” said Sam Stovall, chief investment strategist at CFRA. This year, he adds, the crowded policy agenda “makes everything a little more visible.”

State of the Union speeches have historically had little impact on financial markets, Stovall and other market participants noted, given that they often serve as opportunities for incumbent presidents to tout their achievements and lay out broad policy agendas. But they warned that Trump could do everything from presenting his case for a military campaign against Iran to opposing retaliatory tariffs even more aggressive than those he has announced.

There’s a long list of things on the president’s policy agenda that, if Trump talks about them, could shake up financial markets, noted Michael Rosen, chief investment officer at Angeles Investments. These range from political priorities like Iran, where any outcome could send crude oil prices skyrocketing, to the Federal Reserve’s ruling.

The president plans to use the speech to highlight the administration’s achievements, Caroline Leavitt, White House press secretary, said in a statement to Reuters. He will also state a “front-line agenda to continue to restore the American Dream to working people,” Leavitt said.

QUESTION OF THE BIG OFFER

Part of that agenda is likely to deal with affordability, which market participants expect to be a hot-button issue for voters during the midterm congressional elections in November. In the past, the president has claimed victory against inflation, when he suggested ways to deal with the high cost of home ownership.

He is also expected to talk about the administration’s plans to phase out “Trump accounts,” government-backed investment accounts for children, as part of this focus on affordability.

“He may raise some ideas about mortgage rates that could impact the bond market,” said Tom Graff, chief investment officer at Facet. “There’s also a proposed 10% cap on credit card interest rates. There may be new details on that, which is being closely watched by Wall Street.”

Any proposal for a plan to send stimulus checks to taxpayers before the midterm elections could raise fears of rising deficit levels and send bond yields higher, Rosen said.

Even if Trump uses the speech to take a victory lap, as a note to clients of Beacon Policy Advisors published on Monday, investors say that approach may not reassure the markets, especially if, as Beacon analysts suggest, it is combined with insisting that he will continue to rely on executive action to implement his policies.

“That was the reason for so much chaos, confusion and uncertainty last year that the idea of ​​2026 is going to make a lot of people angry,” Stovall said.

(Reporting by Suzanne McGee, additional reporting by Noel Randewich; Editing by Megan Davies, Rod Nickel)