Tariff Tumult: Uncertainty Up, Stocks Down Early

Published as of: February 23, 2026, 9:12 a.m. ET

(Monday market open) Tariff uncertainty reigned this morning, pushing stocks to early losses and raising volatility on Wall Street. Investors kept buzzing over the Supreme Court's 6-3 decision Friday to overturn President Trump's trade barriers, which threw world trade into confusion and raised questions about the durability of trade deals struck under auspices of the tariff regime.

"This is a big blow to the president's signature economic policy, no question," said Michael Townsend, managing director, legislative and regulatory affairs at Schwab. "But there are other mechanisms available to the president to impose tariffs." And that's exactly what Trump did, saying over the weekend he would implement 15% global tariffs for 150 days and warning additional levies could come. The new policy brings overall tariffs down slightly but could be a blow to countries that negotiated lower levels. Beyond tariffs, the likely highlight this week is AI giant Nvidia's (NVDA) quarterly earnings Wednesday afternoon, which could help set the tone for the struggling technology sector.

Major indexes finished last week stronger despite Friday morning's Personal Consumption Expenditures (PCE) index for December showing prices up more than expected and the government's first estimate of fourth quarter gross domestic product (GDP) surprising with slower-than-expected growth. "Not great news on either the inflation data or GDP for the bulls," said Nathan Peterson, director of derivatives research and strategy at the Schwab Center for Financial Research, or SCFR. Looking ahead, rumbles persist between the U.S. and Iran with more talks scheduled, while retail sector earnings march along with Home Depot (HD) early tomorrow.

1. Salesforce results could outweigh Nvidia: Few companies have Nvidia's influence on Wall Street, but this coming Wednesday afternoon when Nvidia shares the earnings spotlight with Salesforce (CRM), it might take something of a back seat to the giant software firm. Salesforce reports at an auspicious time for the software sector after it and other software stocks got slammed earlier this month by concerns about AI competition. That contrasts with recent resilience in the chip sector—where Nvidia is the biggest name—as 89% of chip stocks traded above their 200-day moving averages compared with zero percent of software stocks as of last week. "Salesforce may be more important to sentiment," than Nvidia, my colleague Peterson said. "Salesforce has the potential to hurt or benefit sentiment, and its forward price-to-earnings ratio (P/E) is currently 15. Have AI disruption concerns been priced in? Salesforce's current multiple is a significant discount compared to historical valuation, but if Salesforce issues weak guidance, that could exacerbate concerns."
    
2. How Fed might read Friday's mixed data: Friday morning's double whammy of slow economic growth and rising prices raised the scepter of stagflation, though one quarter or month isn't a trend. Stagflation—a scenario where prices rise and economic growth fades over a long period, is especially challenging for the Fed as it tries to fill its dual mandate of maximum employment and stable prices. "The warmer-than-expected PCE data is not great for getting clarity around the Fed's next move, especially in light of the relatively hawkish Fed minutes showing that a few members wanted to hike rates," Peterson said. "This will likely cloud the monetary policy trajectory, especially with a new Fed chair coming on board. I'm not sure that markets were set on getting a couple of rate cuts this year, but the uptick makes it less likely." And Schwab chief fixed income strategist Kathy Jones of SCFR said in a podcast last week, "I don't think it's a done deal by any means that there's going to be some rate cuts." This morning, Fed Governor Christopher Waller addressed last week's data and shared arguments for both rate cuts or a pause based on data between now and the Fed's mid-March meeting.
    
3. What if the U.S. hits Iran? The U.S. has gathered military hardware in the Middle East on a scale not seen since the invasion of Iraq more than two decades ago amid reports that President Trump is considering a strike against Iran. As with any military conflict, it's fair to ask what such a strike might mean for global stability, the economy, and the markets. History suggests an answer: Probably very little, at least with the stock market. SCFR looked at 12 wars, from World War II through the Israel-Hamas war that began in 2023 and found that the S&P 500 was higher a year after war began nine times. The three exceptions were World War II, when the U.S. economy was struggling to escape the Great Depression; the war in Afghanistan, which began a month after 9/11, when the SPX was already deep into a post-dotcom-bubble bear market; and the Russian invasion of Ukraine in 2022, which started just as the Fed was preparing to launch its most aggressive rate-hike campaign in decades in response to surging inflation. Nonetheless, past performance does not guarantee future results.

• Novo Nordisk (NVO) plunged 15% early Monday after its obesity drug CagriSema couldn't match results shown by Eli Lilly's (LLY) rival treatment in a trial. Lilly shares rose more than 3% on the news.
   
• DoorDash (DASH) fell 3% after the delivery firm froze service for parts of the U.S. East Coast during the blizzard.
   
• Home Depot (HD) is up more than 10% so far this year but shares slipped early today ahead of tomorrow morning's earnings report. Last time out, Home Depot missed analysts' earnings per share estimates for the third straight quarter and cut its full-year outlook, CNBC reported. Home Depot then blamed a weak housing market. Recent housing data hasn't improved much but Home Depot's leader said in November he expects home improvement activity to increase.
   
• Paramount Skydance (PSKY) climbed 1% this morning. Today could be Paramount's last chance to outbid Netflix (NFLX) for Warner Bros. Discovery (WBD) based on a deadline WBD gave Paramount last week, Barron's noted.
   
• Domino's Pizza (DPZ) warmed up 6% early today despite the company missing analysts' earnings per share estimates. Instead, investors appeared to focus on a stronger-than-expected gain in revenue for Domino's, shares of which hit two-year lows recently amid general weakness in the restaurant sector. Quarterly net revenue grew 6.4% annually and sales at U.S. outlets open at least a year rose 3.7%.
   
• Shares of biotech firm Arcellx (RCLX) catapulted 78% this morning following news that Gilead Sciences (GILD) will buy the cancer drug company for $7.8 billion. Gilead shares fell 1.5%.
   
• With the notable exception of Nvidia, tech stocks generally retreated in overnight trading, signaling possible pressure on major indexes.
   
• Airline stocks fell this morning on blizzard-related disruptions.
   
• Software stocks stayed under pressure after Jefferies downgraded Workday (WDAY) and DocuSign (DOCU), noting that apps software names have been hit harder than overall software.
   
• Alphabet (GOOGL) climbed 0.5% early today after being upgraded to overweight from equal weight by Wells Fargo. The company has a leadership position in the "three key traits" of an AI winner: customer data, distribution, and compute capacity, the analyst told investors.
   
• Silver (/SI) and gold (/GC) rose again this morning amid the new tariff-related uncertainty.
   
• Corning (GLW) surged 7.37% Friday after the specialized glass and ceramics maker secured a multi-year $6 billion deal with Meta to supply advanced optical fiber and connectivity solutions for data centers.
   
• Though the tech-heavy Nasdaq gained about 1% last week, it had little help from sagging software. That sub-sector dragged the Nasdaq despite news that ServiceNow (NOW) executives have canceled all future planned stock sales and its CEO entered a share purchase agreement to buy $3 million of common stock. "Investor sentiment around this space remains cautious and skeptical on lingering AI disruption concerns," Schwab's Peterson wrote in his Weekly Trader's Outlook.
   
• Fourth quarter earnings season approached the finish line with 425 S&P 500 companies reporting so far. Of those, a relatively low 66% beat analysts' earnings expectations, while earnings per share growth is a healthy 12.36%, according to Bloomberg data.
   
• December new home sales were a strong point Friday, coming in at a seasonally adjusted annual rate of 745,000, well ahead of the Briefing.com consensus for 714,000. Still, new home sales declined 1.4% from November, and pending home sales tumbled to all-time lows last Thursday.

The divergence between the S&P 500 Semiconductors & Semiconductor Equipment (Industry Group) 35% Capped Index ($SP500#4530TR—red line) and the S&P 500 Application Software (Sub Industry) index ($SP500#451030—cyan line) illustrate growing fears that generative AI tools will devastate Software-as-a-Service (SaaS) companies.