^GSPC Today, February 26: SOTU Fact-Checks Flag Tariff, Growth Risks
Fact-checks of Trump’s state of the union address put tariff, inflation, and jobs claims under a bright light, raising market policy risk for Australian investors. With the S&P 500 (^GSPC) near 6,890, legal pushback on tariffs and disputed growth claims can widen risk premia tied to taxes and trade. For Australians with US exposure through super funds and ETFs, today’s speech fallout matters for hedging choices, sector tilts, and timing. We outline what changed, how price signals look, and practical next moves.
What fact-checks changed for investors today
Independent reviews flagged exaggerations on inflation progress, job creation, and real growth, increasing uncertainty around the economic story that drives earnings expectations. A detailed breakdown measured 13 bold statements against available data, reminding markets to focus on official prints over rhetoric. See coverage measuring the claims against evidence in The Age’s explainer: source.
Tariff revenue claims also drew scrutiny, while a recent Supreme Court ruling struck down parts of new tariff actions. That legal backdrop limits policy reach and adds timeline risk as cases cycle back through agencies and lower courts. ABC noted how political showmanship masked these stakes for markets and trade: source.
When the state of the union address inflates expectations, repricing can follow as data and courts challenge the narrative. Equities sensitive to corporate tax rates, import costs, and global demand may see higher discount rates. That typically pushes investors toward quality balance sheets, stable margins, and less trade-intensive revenue until clarity improves.
^GSPC snapshot and technical setup
The S&P 500 sits at 6,890.06, with today’s range 6,815.43 to 6,899.17. It is up 1.29% year to date and 16.65% over one year. The 50-day average is 6,896.08, and the 200-day is 6,529.65. Price is below the Bollinger upper band at 7,011.24 and above the lower at 6,796.90, indicating room both ways if volatility rises.
RSI is 54.58, consistent with balanced momentum. ADX at 14.88 signals no strong trend. MACD histogram is positive at 1.08, a mild bullish bias. ATR of 79.36 points frames expected daily swings. Volume sits at 5.27 billion versus a 5.19 billion average, hinting at engaged flows as policy headlines and fact-checks filter into positioning.
Model points sit at 6,865 for next quarter and 7,066 over the next year, extending to 8,316 in three years. Our composite score is 58.66, a C+ with a hold bias. With the state of the union address increasing policy noise, lean on disciplined entries near support, sized for higher volatility and headline risk.
Implications for Australian portfolios
For Australia, tariff talk and contested US growth claims can sway the AUD and ASX sectors tied to US demand. A firmer USD on tariff threats can pressure AUD returns on unhedged US assets. Hedged exposures may cushion currency swings, while unhedged can benefit if AUD weakens on tighter US financial conditions or stronger US data.
Aussie miners and energy track global prices linked to US growth and trade. Healthcare and tech with US revenue can face margin and translation shifts if tariffs and the dollar move. Super funds and SMSFs often access the S&P 500 through ETFs, so position sizing and currency policy matter when the state of the union address raises uncertainty.
Stay data-first. Prioritise quality cash flows, strong interest cover, and pricing power. Balance hedged and unhedged US exposure by your spending currency and horizon. Use staged orders around 50-day and 200-day reference levels. Watch tariff headlines, court calendars, and official CPI, payrolls, and GDP updates before adding cyclicals leveraged to trade.
What to watch next
Monitor Supreme Court follow-through and agency responses on tariffs that were struck down. Remand processes and fresh rulemaking can take months, keeping trade policy in flux. Companies exposed to imports and global supply chains may hold back capex until clearer guidance arrives, affecting earnings momentum and risk appetite.
The state of the union address put a spotlight on inflation, jobs, and growth. The next CPI, nonfarm payrolls, and GDP revisions will help confirm or challenge the speech narrative. Surprises in real income and hours worked can shift earnings outlooks and equity risk premia faster than speeches or polls.
Track breadth, credit spreads, and implied volatility to judge risk appetite. Rising credit spreads with weak advance-decline lines can flag caution even if the index holds. Watch copper, oil, and transport shares for trade signals. If volatility builds while ADX stays low, expect whipsaws and consider smaller position sizes.
Final Thoughts
Fact-checks of the state of the union address reminded us that speeches do not change hard data or court rulings. For Australian investors with US exposure, the mix of tariff uncertainty and disputed growth claims argues for discipline. Use the 50-day and 200-day levels as guides, and keep position sizes sized to ATR-level swings. Prioritise companies with strong cash generation, low leverage, and diversified supply chains. Balance hedged and unhedged holdings based on your spending needs. Watch official CPI, payrolls, and GDP for confirmation, along with court updates on tariffs. Add cyclicals only when data and legal paths align, not just when the headline cycle is loud.
FAQs
How does the state of the union address affect Australian investors holding US equities?
It can shift sentiment on taxes, trade, and growth, which moves discount rates and earnings expectations. That can affect the S&P 500 and the AUD, impacting unhedged returns. When claims on inflation or jobs are disputed, markets lean on upcoming CPI, payrolls, and court decisions. In the meantime, maintain diversification, consider a partial currency hedge, and favour firms with pricing power and strong balance sheets.
What do today’s technicals for the S&P 500 suggest after the state of the union address?
The index trades near 6,890 with RSI at 54.6 and ADX at 14.9, showing balanced momentum and no dominant trend. MACD histogram is modestly positive. Price sits between Bollinger bands with ATR around 79 points, implying larger daily ranges. With policy and legal noise elevated, use staggered entries, respect stops, and size positions for volatility rather than conviction alone.
Why do fact-checks and court rulings on tariffs matter for portfolio strategy?
They shape expected cash flows, costs, and discount rates. If tariff claims are overstated or struck down by courts, projected revenues and margins reset. That can change sector leadership and currency moves. While the headline cycle can be loud, only official data and binding rulings change fundamentals. Keep exposure flexible, tilt toward quality, and add cyclicals once rules and data confirm the outlook.
Should Australians hedge currency after the state of the union address?
Consider your spending currency, horizon, and risk tolerance. Tariff threats and disputed growth claims can lift the USD, benefiting unhedged AUD investors, but reversals can cut gains. A blended approach often works: keep a core hedged sleeve to stabilise volatility and an unhedged sleeve to capture dollar moves. Reassess after key CPI, payrolls, and court updates on trade policy.
Disclaimer:
The content shared by Meyka AI PTY LTD is solely for research and informational purposes. Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.