By Suzanne McGee and Laura Matthews
PROVIDENCE, Rhode Island/NEW YORK, Feb 24 (Reuters) – The State of the Union speech from President Donald Trump on Tuesday evening comes at a pivotal point for investors, sideswiped by market turbulence in recent months and craving stability.
Days after the Supreme Court overturned Trump’s emergency-powers tariffs, market participants are preparing for a speech that could touch on potentially market-moving policies, from trade to affordability to Iran.
The stock market during Trump’s second term has been volatile as investors react to the Republican’s push to overhaul U.S. trade relationships.
While the S&P 500 has gained 13% in the 400 days since Trump’s January 2025 inauguration, the benchmark has barely increased in 2026 as Wall Street lags international stock markets and the dollar trades near 2022 lows.
“Just as the winter storms in the Northeast have been adding to the piles of snow on the roads, I’m afraid that this speech is just going to add to the levels of anxiety in the market,” said Sam Stovall, chief investment strategist at CFRA. This year, he adds, the crowded policy agenda “makes everything a little less predictable.”
State of the Union speeches have historically had little impact on financial markets, Stovall and other market participants noted, given that they tend to serve as occasions for incumbent presidents to trumpet their achievements and lay out broad policy agendas. But they caution that Trump could do everything from laying out his case for a military campaign against Iran to arguing for more aggressive replacement tariffs than he has announced.
There is a long list of items on the president’s policy agenda that, if Trump speaks about them, could shake up financial markets, noted Michael Rosen, chief investment officer at Angeles Investments. These range from political priorities such as Iran, where any ultimatum could send crude oil prices sharply higher, to Federal Reserve governance.
The president plans to use the speech to showcase the administration’s achievements, Karoline Leavitt, the White House press secretary, said in a statement to Reuters. He will also spell out “an ambitious agenda to continue bringing the American Dream back for working people,” Leavitt said.
AFFORDABILITY QUESTION LOOMS LARGE
Part of that agenda is likely tackling affordability, which market participants expect to be a hot-button issue for voters during midterm congressional elections in November. The president has previously claimed victory against inflation, while proposing measures to address the high costs of home ownership.
He is also expected to talk about the administration’s plans to roll out “Trump accounts,” government-supported investment accounts for babies, as part of this affordability focus.
“He could propose other ideas around mortgage affordability that might impact the bond market,” said Tom Graff, chief investment officer at Facet. “There is also the proposed 10% cap on credit card interest rates. There could be new details around that, which is definitely being closely watched by Wall Street.”
Any suggestion of a plan to send stimulus checks to taxpayers ahead of the midterm elections would 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 from Beacon Policy Advisors published on Monday suggests, investors said that approach might not reassure markets, especially if, as Beacon analysts suggested, it is combined with an insistence that he will continue to rely on executive action to implement his policies.
“That’s been the recipe for so much chaos, confusion and uncertainty in the last year that the idea of more of that in 2026 would spook a lot of folks,” said Stovall.
(Reporting by Suzanne McGee, additional reporting by Noel Randewich; editing by Megan Davies, Rod Nickel)
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