Major indices are moving lower across the board and near session lows, with the Russell 2000 lagging the pack. This comes as investors assess the new tariff dynamics (more below) as well as look towards an earnings and economic data filled week.

Magnificent seven names are mostly in the red, with Tesla (TSLA) lagging the group as investors assess when level 3 self-driving autonomy will be rolled out and the implication of the new tariff regime.

Five sectors are moving higher, with the more defensive sectors of Health Care (XLV) and Consumer Staples (XLP) leading the way. Notably, Health Care is getting a boost from Eli Lilly (LLY) after the FDA approved a label expansion for Zepbound to include a multi-dose KwikPen device. On the other hand, Financials (XLF) are lagging and being led lower by bank components. The other laggard is Consumer Discretionary (XLY), moving lower as investors assess the shifting tariff landscape.

Notably, software stocks are approaching an even forward price-earnings  (P/E) compared to the broader S&P 500, after trading at much higher multiples for years.

Trump Responds to SCOTUS

Trump took to Truth Social this morning to discuss the Supreme Court’s ruling and indicated it would allow him to use different tariffs more effectively. Additionally, this weekend he announced a temporary 15% global tariff to go into effect on Tuesday.

He also warned countries not to play games with the USA over the recent ruling.

Economic Data

New orders for manufactured goods fell 0.7% M/M in December, following a 2.7% rise in November, and missing expectations of a 0.5% decline. While non-durable goods orders were relatively unchanged, durable goods orders fell by 1.4%. The drop in durable goods orders was primarily due to a drop in transportation equipment stemming from a drop in non-defense aircraft and parts, which was partially offset by increases in computers and electronic products as well as machinery.

Meanwhile, the Dallas Fed Manufacturing Index rose to 0.2 in February from -1.2 in January.

Notable Points:

• Company outlook held relatively steady at 3.1
• Finished goods prices held at 17.9
• Raw material costs eased to 31.7 from 36.7
• Wage growth climbed to 31.9 from 17.4
• Future production rose 5 points to 34.3

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