Stocks broke their two-week losing streak as AI-driven stress eased while the Supreme Court handed down a ruling limiting Presidential powers to impose tariffs under the International Emergency Economic Powers Act, effectively voiding nearly 70% of the tariffs put in place over the last year.
Economic Highlights:
- Despite a number of solid economic reports to finish out 2025, Q4 GDP rose just 1.40%. The Commerce Department chalked the deceleration up to the federal government shutdown which ran through the first half of the quarter impacting both spending and investing, trimming an estimated -1.00% off economic growth.
- Inflation held steady in December according to the Fed’s preferred inflation gauge, the core PCE index. The core PCE index, which excludes volatile food and energy, rose 0.40% in December, bringing the year-over-year increase to 3.00%. That’s up 0.2% from November. December’s increase was driven by a 0.40% rise in goods prices and 0.30% increase in services.
- Tariffs did little to reduce the deficit in 2025. For the full year, the U.S. ran a $901.5 billion deficit, down just 0.20% from the prior year. 2025’s deficit was only slightly less than the record $923.7 billion shortfall in 2022. For the month of December, the deficit totaled $70.3 billion, an increase of $17.3 billion from November. A surge in imports of industrial supplies and materials, mostly non-monetary gold, copper, and crude oil drove the increase.
- Fed Minutes showed a divided Fed at their January rate-setting meeting with most officials indicating they wanted to see further progress on inflation before considering any more rate cuts. However, some officials pushed for rate hikes to be on the table if inflation remains above the Fed’s 2.00% target level.
Supreme Court Puts Tariffs in Limbo
Stocks stabilized as AI-driven concerns abated during a shortened trading week. The S&P 500 posted a 1.07% gain with growth stocks outperforming value stocks for the first time in five weeks. Equities got a surprise assist on Friday following the Supreme Court’s ruling that effectively struck down the Administration’s use of emergency powers to impose tariffs. In its ruling, the Supreme Court said the International Emergency Economics Powers Act (IEEPA) does not authorize the President to impose tariffs, which is the legal mechanism utilized for nearly 70% of the tariffs imposed since Liberation Day. The ruling hinged on the court’s interpretation of the Act’s language giving the President the power to “regulate” importation or exportation. In his opinion which was ultimately supported by the majority, Chief Justice Roberts wrote, “The term “regulate,” as ordinarily used, means to “fix, establish, or control; to adjust by rule, method, or established mode; to direct by rule or restriction; to subject to governing principles or laws.” Black’s Law Dictionary 1156. The facial breadth of this definition places in stark relief what ”regulate” is and that it is not usually thought to include: taxation.” In essence, the Court found that tariffs are a form of taxes and that Congress had not intended to delegate taxation authority to the Executive Branch under IEEPA when the Act was passed in 1977. Interestingly, while striking down Trump’s use of IEEPA, the Court signaled that other tariff statutes remain available, which the President subsequently vowed to follow as the Administration’s roadmap for keeping tariffs in place. The ruling leaves open the questions of whether tariffs will be rolled back while the Administration legally regroups and what will happen to the nearly $135 billion in tariff revenue collected by the government to date. Equities responded positively to the ruling since tariffs have been continually blamed for fueling inflation while the bond market sold off due to the possibility that tariff collections will need to be paid back, exacerbating the federal deficit.
On the economic front, Q4 GDP came in lighter than expected as the federal government shutdown proved to be a bigger than expected drag on growth. The reading is likely a blip given that recent economic reports point to continued momentum into 2026. The AtlantaFed’s GDPNow estimate for Q1 2026 stands at 3.10%, which should continue to support the market.
The Week Ahead
Key reports on inflation and consumer confidence.
Gold Rush and the Latest Medal Count
In just a few days, the Winter Olympics taking place in Milan and in Cortina d’Ampezzo, Italy will come to an end as more than 3,500 athletes from 93 countries pack up their skis and skates, curling stones, and parkas and head home. This is the fourth time the Games have been held in Italy, with Cortina d’Ampezzo previously hosting the Winter Olympic Games in 1956. Turin hosted in 2006, and the Summer Games were held in Rome in 1960.
As of Friday morning, Norway, a country with just 5.6 million people, is leading both the overall medal count with 37 total medals and the gold medal count with 17 awarded to Norway so far. Norway is positioned to potentially lead the Winter Games medal table for a third straight Olympics — a feat not achieved in two decades.
The United States stands in second place with 27 medals, just barely edging out host nation Italy, which stands in third place with 26 medals. Since the Winter Olympics debuted in 1924, the U.S. has tallied the most gold medals in a single Winter Games only one time – at the 1932 Lake Placid Games where they won six of 14 golds awarded. Those 1932 Games also stand as one of just two Winter Olympics where Team USA won the most total medals, finishing with 12. The other time was at the 2010 Vancouver Games where they brought home 37 medals. The U.S. tied for the third-most gold medals at those Games with nine.
Below is the top ten medal count as of Friday:
1. Norway: 37 Total (17 Gold, 10 Silver, 10 Bronze)
2. United States: 27 Total (9 Gold, 12 Silver, 6 Bronze)
3. Italy: 26 Total (9 Gold, 5 Silver, 12 Bronze)
4. Japan: 24 Total (5 Gold, 7 Silver, 12 Bronze)
5. Germany: 22 Total (6 Gold, 8 Silver, 8 Bronze)
6. France: 20 Total (6 Gold, 8 Silver, 6 Bronze)
7. Austria: 18 Total (5 Gold, 8 Silver, 5 Bronze)
8. Netherlands: 17 Total (7 Gold, 7 Silver, 3 Bronze)
9. Switzerland: 16 Total (6 Gold, 6 Silver, 4 Bronze)
9. Sweden: 16 Total (6 Gold, 6 Silver, 4 Bronze)
Tomorrow, Saturday, February 21st, will be one of the busiest medal days with 10 gold medals up for grabs. Below are some of the competitions taking place:
Men’s curling final. This event was rocked by a cheating scandal and a profanity-laced remark this past week after Sweden accused Canada of touching a curling stone past the point where it is supposed to be let go. The officials could not see the “double touch” and in later men’s and women’s matches, teams were disqualified for the very same alleged infraction. Tomorrow’s match pits Canada against Great Britain.
Women’s halfpipe final (freestyle skiing). The halfpipe has been part of snowboarding since 1998, but the freeskiing counterpart debuted at the Winter Olympics in 2014. Skiers execute tricks on each wall of the halfpipe as they make their run, grabbing their skis during every trick. Competitors can typically land five or six tricks in one run which are scored by a team of judges based on factors such as height, difficulty, variety, and execution.
Mixed team aerials final. This event features high-flying acrobatics on skis. It has been part of the Olympics since 1994. At least eight countries are expected to compete in this event with each team consisting of three athletes from the same nation and typically two men and one woman. Judges score jumps off a ramp based on air (execution of the takeoff, plus height and distance), form, and landing.
Cross Country Skiing Men’s 50km Mass Start final. In the quest for gold, athletes cover a grueling distance of more than 30 miles. It’s the longest Olympic cross-country race requiring pure stamina and strategy on a course filled with long uphill climbs and fast downhill sections.
Below are some of the final gold medal competitions that will take place Sunday, February 22nd:
Men’s Ice Hockey Gold Medal Game. The biggest team event finale of the games is set for Sunday morning and will feature Canada, who narrowly beat Finland in a semifinal, against the team that wins this afternoon’s matchup between the U.S. and Slovakia. Unlike in the NHL, there will be no “dropping the mitts,” “chuckin’ knucks,” or “getting into a donnybrook” which all mean fighting in the hockey world since the Olympics are governed by the International Ice Hockey Federation (IIHF) and have a completely different rulebook than the NHL. In the NHL, a fight warrants a five-minute major penalty which is most often served simultaneously with a member of the opposing team. The two penalties essentially cancel each other out. In the IIHF, fighting most often results in an ejection from the game. It also often results in suspensions, which carry over from one IIHF event to the next. For example, if a player were to get suspended following the gold medal game, he’d have to sit out the duration of his suspension at the World Championship in the spring.
Women’s curling gold medal game: It will be Switzerland versus Sweden in the women’s gold medal game on Sunday. Sweden defeated Canada in their semifinal, and Switzerland beat the United States to advance. In curling, teams take turns sliding heavy granite stones toward a target known as the “house.” Each team of four players designates a skip (team captain) and a vice-skip. The skip directs the team while standing by the house at the far end of the ice. The vice-skip takes over the skip’s duties when the skip is delivering the stones. Competitors may use a stone to guard the house or take out opposing stones. When an end (like an inning or round) is complete, the next end is played in the opposite direction. After all stones have been delivered to the scoring end of the ice, the players themselves calculate the score. The team closest to the center, known as the “button,” scores a point after each end and an additional point for every stone closer to the button than their opponent’s closest stone. Teams may control the trajectory and distance of a throw by sweeping the ice in front of a stone. The friction of the sweeping causes the ice to melt. It also simultaneously looks aggressive and very entertaining.
Bobsled Four-man final. The extremely fast and fun to watch event will conclude on Sunday. Earlier this week, Germany swept the two-man bobsled competition winning gold, silver and bronze medals. Team USA finished fourth by just .44 seconds and will have an opportunity for redemption in Sunday’s four-man final.
Cross Country Skiing Women’s 50km Mass start: Female cross-country skiers are set to make Olympic history this Sunday, racing a 50km classic event for the first time at a Winter Games. The event challenges athletes fatigued from five previous contests and facing an immediate return to the World Cup circuit. A mass start requires all skiers to begin at the same time. The event is likely to take more than two hours to complete. Jessie Diggins and Julia Kern are set to represent Team USA on Sunday. Diggins is Team USA’s most decorated cross country skier and is competing in her fourth straight Olympics. She has already medaled this week in a different event despite battling a rib injury. This is Kern’s second Olympics.