Global Highlights for This Week: Tariff Storms and U.S.-Iran Tensions—Can NVIDIA Save the AI Bull Market Again?
Last week, U.S. equities staged a broad recovery, with all three major indices recording weekly gains, and both the S&P 500 and the Nasdaq Composite rising by more than 1% collectively.
On Friday, market sentiment was bolstered after the U.S. Supreme Court ruled that the Trump administration’s large-scale tariff measures implemented under the International Emergency Economic Powers Act (IEEPA) lacked clear legal authorization.
However, over the weekend, Trump posted that he would raise the proposed 10% global import tariff to 15%. He further stated that within the coming months, the U.S. government would identify and announce new, legally permissible tariff measures.
This renewed uncertainty will need to be digested by the market this week. Shortly before press time, German Chancellor Friedrich Merz stated he would travel to Washington in just over a week to discuss tariffs with Trump, approaching the talks with a coordinated European Union position.
Meanwhile, reports from Iranian and U.S. officials, as well as diplomats from certain Gulf and European nations, indicate that the risk of military conflict is rising as negotiations between the U.S. and Iran remain deadlocked.
Mid-week, Trump will deliver the State of the Union address. White House Press Secretary Karoline Leavitt previously did not disclose whether Trump plans to clarify the objectives and justifications for military action against Iran during the speech.
In terms of earnings, NVIDIA is the paramount focus, widely regarded as a key bellwether for the sustainability of the AI boom and a potential directional guide for the U.S. market. Investment bank Oppenheimer expects the results to exceed market expectations.
However, Marta Norton, Chief Investment Strategist at Empower, noted, "The market has expected outsized performance from NVIDIA for years, so when everyone is waiting for a surprise, it becomes even harder to truly deliver one."
Furthermore, comments from NVIDIA CEO Jensen Huang during the conference call could influence the entire AI value chain, particularly the cloud computing giants whose stock prices have been pressured by skepticism over the return on capital expenditures.
Nick Giorgi, Chief Equity Strategist at Alpine Macro, said: "Huang must demonstrate his confidence in his customers. NVIDIA has been 'cheerleading' for its clients, which is exactly what investors in the entire ecosystem want to see."
Given the intensifying impact of AI, the importance of earnings from the software sector (especially Salesforce) has also significantly increased.
King Lip, Chief Strategist at BakerAvenue Wealth Management, stated: "This week is critical for the software sector. The overall sell-off may be overdone, but some companies must find ways to adapt and innovate."
Despite the weakness in tech stocks, the energy, industrial, and consumer staples sectors continue to support index performance.
Empower's Norton remarked: "This is a confusing market—strategies that worked in 2025 are failing in 2026; sectors that were neglected last year are instead performing the best this year."
Overview of Major Overseas Economic Events This Week:
Monday (Feb 23): Fed Governor Waller speaks; U.S. Dec Factory Orders; Feb Dallas Fed Business Activity Index
Tuesday (Feb 24): President Trump delivers State of the Union address; ECB President Lagarde speaks; U.S. Dec FHFA House Price Index; Fed Governor Waller speaks; Fed Governor Lisa Cook speaks on AI; Feb Conference Board Consumer Confidence
Wednesday (Feb 25): Fed’s Barkin and Collins attend a panel; RBA Governor Bullock fireside chat; Eurozone Jan CPI (Final); U.S. Weekly EIA Crude Oil Inventories
Thursday (Feb 26): Bank of Korea Rate Decision; Fed’s Musalem speaks; ECB’s Lagarde addresses EU Parliament; Eurozone Feb Economic Sentiment; U.S. Weekly Initial Jobless Claims
Friday (Feb 27): France Q4 GDP (Final); Germany Feb CPI (Prelim); U.S. Jan PPI