The Court Gave You a Gift. The President Took It Back Before You Could Open It.
The Court Gave You a Gift. The President Took It Back Before You Could Open It.
February 22, 2026
Friday morning, six Supreme Court justices handed the market what it had been quietly praying for since last spring. IEEPA tariffs — the sprawling, legally dubious emergency-powers scheme that had been collecting $133 billion-plus a year and injecting low-grade panic into every earnings call from Target to Toyota — struck down, 6-3. Gone. Unconstitutional. Exceeds authority.
The S&P 500 climbed 0.69%. The Nasdaq recovered its nerve and added 0.9%. Retail stocks jumped. The dollar softened. Yields ticked up on refund anxiety — because $170 billion in potentially owed-back duties could widen deficits in ways that give bond traders nightmares — but the dominant mood was relief. Clean, uncomplicated relief.
It lasted approximately four hours.
By afternoon, the same president whose tariff regime the Court had just shredded announced he would sign an executive order imposing a 10% global tariff under Section 122 of the Trade Act of 1974. Same outcome. Different legal wrapper. The lawyers will fight over whether that statute grants the same powers, and markets will wait, and businesses will keep refusing to sign long-term supply contracts, and the uncertainty that has been the defining texture of 2026 so far will continue its quiet work.
You almost have to admire the move, in a dark way. The Court closes one door, and within the same news cycle, a different door is already open and the furniture is being moved through. Wall Street analysts are now gaming out Section 122 litigation timelines. Wolfe Research's policy team put it plainly: the tariffs will be reconstituted under other authorities. This isn't resolution. It's a loop.
What the market chose to celebrate, perhaps rightly, is the precedent. An independent court said no — the emergency powers statute cannot be weaponized to rewrite trade law wholesale. That matters at the level of institutional architecture even if the practical tariff load shifts by five basis points in either direction. Markets price systems. The system held, sort of, for a moment.
Meanwhile, Q4 GDP came in at 1.4% when the street wanted 3%. The government shutdown absorbed roughly a percentage point of that, which economists expect to reverse in Q1, so the panic was muted. But underneath that excuse sits a more uncomfortable number: December PCE came in at 0.4% month-over-month, above consensus. Core PCE matched at 0.4%. Headline PCE running at 2.9% year-over-year. The Fed's January minutes, released earlier in the week, showed "several" members open to describing future decisions as "two-sided" — Fed-speak for: a hike is now something we're willing to say out loud.
June rate cut odds dropped from 85% to 57% in a week. March is now effectively off the table at 5%. The Fed wanted to cut. The data has been refusing to cooperate since November. And now you have a fresh tariff regime coming in hot, which structurally feeds into goods inflation, which the Fed will have to stare at in every meeting for the next year. Jerome Powell doesn't sleep well in February.
The crypto situation is its own kind of comedy, if you enjoy dark material.
Bitcoin is sitting near $67,000 today — which sounds fine until you remember it was $127,000 in October. The "digital gold" thesis has had a rough four months. Gold futures, in the same period, are up over 60%. The divergence isn't a blip. It's a verdict. Every geopolitical escalation, every tariff shock, every macro anxiety event that should theoretically have sent risk-averse money toward a decentralized, apolitical store of value has instead sent it toward the same metal humans have hoarded since before Rome. Institutional ETF flows have been negative for months. Spot Bitcoin ETFs, which were supposed to be the demand catalyst that justified $100K+, have collectively bled billions since October.
A Minneapolis Fed official called the space "utterly useless" last week — the kind of quote that ages in one of two ways: as an embarrassing footnote when BTC hits $200K, or as an accurate diagnosis that got ignored for too long. Right now the charts don't argue with him.
There's a structural explanation that doesn't require conspiracy. AI has emerged as a competing institutional narrative. When capital is chasing the next transformative technology, it doesn't necessarily flow into two transformative narratives simultaneously. Bitcoin had 2024. AI has 2025 and 2026. The overlap was always going to be uncomfortable.
ETH is down 33% year-to-date. XRP, for all its institutional payment infrastructure story, is trading near $1.48. Solana hit two-year lows earlier this month. The entire complex is in a drawdown structurally consistent with prior crypto winters — except this one arrived while the US President was publicly pro-crypto and had installed a friendly SEC chair. The "regulatory tailwind" bull case has not survived contact with macro gravity.
The one number that will matter more than all of this next week: Nvidia reports Wednesday.
Q4 earnings season is mostly done, with S&P 500 companies growing earnings 12% year-over-year — well above the 7% forecast entering the quarter. Nine of eleven sectors are in positive growth territory. The aggregate picture is genuinely solid. But tech has underperformed in 2026, and the anxiety is specific: AI agents are increasingly capable of handling tasks that software companies built entire business models around. The competitive moats aren't obviously durable. Markets have been selling the ambiguity.
Nvidia is the swing vote. If the numbers confirm that AI infrastructure spending is still accelerating — that hyperscalers haven't blinked — tech has a reason to reclaim the 100-day moving average the Nasdaq has been living below. If guidance disappoints, or if even a single major customer hints at capex hesitation, Wednesday night is going to be ugly.
Everything else — SCOTUS, Section 122, PCE, the Fed's two-sided murmuring — is noise around that data point. The AI buildout either remains the structural demand engine of this cycle or it starts to look like the most expensive collective bet since mortgage-backed securities found religion in diversification.
State of the Union is Tuesday. The president will say the economy is fine. He will say trade policy is strong. Markets will nod politely and wait for Jensen Huang to speak.
The week ahead, in order of actual importance:
Nvidia earnings (Wednesday). January PPI (Friday). State of the Union (Tuesday, mostly theater). Home Depot and Alibaba report Monday and Tuesday respectively — BABA reopening after Lunar New Year will give a read on Chinese consumer appetite and how tariff uncertainty has landed in corporate guidance from the other side of the Pacific.
China's mainland markets reopen after the holiday. Watch that reaction to Friday's SCOTUS ruling closely. Beijing's read on whether American institutional checks still function is not irrelevant to how they price the next round of negotiations.
The game is still live. Play accordingly.
Nothing here is investment advice. All of it is opinion. The author holds views that may change without notice and without apology.
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