What matters today
Market Snapshot
Close Feb 20–21 / Intraday Feb 23
| INDEX / PAIR | LEVEL | DAY CHG | SIGNAL |
|---|---|---|---|
| S&P 500 | 6,910 | +0.7% | ▲ SCOTUS tariff ruling lifts; gains capped by Section 122 + Iran fears |
| Nasdaq | 22,886 | +0.9% | ▲ Snapped 5-week losing streak; CrowdStrike −8%, Okta −9% on AI disruption fears |
| Dow | 49,626 | +0.5% | ▲ +231pts; recovered from early −200pt loss on SCOTUS tariff ruling |
| TSX Composite | 33,818 | +0.7% | ▲ CUSMA exemption holds; IEEPA relief priced in |
| 10yr Treasury | 4.09% | +2bp | ▶ Hot PCE still weighing; tariff uncertainty persists |
| DXY (USD) | ~97.8 | −0.2% | ▼ Near 4-year lows; tariff authority diminished |
| USD/CAD | ~1.42 | CAD +0.3% | ▲ Loonie gains on IEEPA relief; CUSMA key |
| WTI Crude | ~$66.5 | −2.1% | ▲ Iran strike risk; “limited” framing caps upside |
| Gold | ~$5,060 | +0.4% | ▲ Safe haven; geopolitical + tariff uncertainty |
Conflict & Stability Tracker
Critical
Iran — State Dept Orders Lebanon Departure; Strike Window Narrowing
Tense
US Trade — Section 122 Tariffs Take Effect; Legal Challenges Expected
Tense
Domestic — DHS Partial Shutdown Day 9; Blizzard Compounds Chaos
Watching
Mexico — El Mencho Killed; Cartel Retaliation Engulfs 12+ States
Fast Take
Developments to Watch
At midnight tonight, a legal regime change takes place in US trade policy. CBP will deactivate every IEEPA tariff code and activate 15% duties under Section 122 of the Trade Act of 1974 — a statute that has never been used by any president in its half-century existence. The administration’s own DOJ lawyers argued in the IEEPA case that Section 122 has “no obvious application here” because it addresses balance-of-payments deficits, which are “conceptually distinct from trade deficits.” That admission may come back to haunt them.
The constraints are real. Section 122 caps tariffs at 15% and limits duration to 150 days without Congressional approval. The clock expires July 24, creating what analysts are calling the “tariff cliff” — the single most important date on the market calendar. The administration plans to use the window to launch Section 301 investigations against most major trading partners, but those investigations take months and their conclusions must withstand judicial review.
The refund question is equally consequential. An estimated $142–175 billion in IEEPA tariffs has been collected. The administration stipulated refunds would follow a “final and unappealable decision” — which has now arrived. Nearly 2,000 importers have filed claims at the Court of International Trade. The logistics of processing that volume are staggering. Treasury Secretary Bessent claims combining Section 122, 232, and 301 tariffs will produce “virtually unchanged tariff revenue” — a statement that critics say amounts to evidence the new investigations are predetermined.
The State Department’s order for nonessential diplomats and family members to leave Lebanon is the most concrete pre-conflict indicator in the current crisis. Combined with military family departure preparations in Bahrain, two carrier strike groups on station, and an Atlantic Council analyst estimating “90% chance we see kinetic action,” the posture has moved from deterrence to preparation.
Iran’s response has been to signal both readiness and restraint. The IRGC chief stated all US assets are “within our range.” Iran’s defence council declared a shift from defensive to “offensive doctrine” — unprecedented language since the 1980s. Tehran conducted a joint naval exercise with Russia in the Gulf of Oman. Yet Iran’s ambassador to the UN also said the country “does not seek tension or war.” The dual signal suggests Iran is preparing for the worst while leaving diplomatic space open.
Experts warn that a second US strike would elicit a far more forceful Iranian response than June 2025’s relatively restrained retaliation at Al Udeid. Iran’s short-range ballistic missiles can reach every US base in the Gulf. Closing the Strait of Hormuz — through which 20% of global oil flows — remains the ultimate asymmetric threat. Oil markets are pricing “limited” action at ~$66 WTI, but the upside risk to $85–100 on escalation is significant.
Canada faces a twin test this week. First, the immediate crisis: 18,700 Canadians are registered in Mexico, including 4,672 in Jalisco state alone — ground zero of the cartel violence. Air Canada, WestJet, Porter, and Flair have all cancelled Puerto Vallarta flights. Foreign Affairs Minister Anand said Canada is “deeply alarmed.” Canadians describe Puerto Vallarta as a “war zone” with fires visible from beaches and shelter-in-place orders in effect. The consular challenge is significant and comes as Nexus border-crossing systems are also down due to the US government shutdown.
Second, the structural trade question. The SCOTUS ruling is unambiguously positive for Canada — the IEEPA tariffs that hit Canadian goods are dead. But the replacement Section 122 tariffs taking effect Tuesday include a CUSMA exemption, meaning 85% of Canada-US trade remains tariff-free. The real risk lies ahead: Section 232 tariffs on steel, aluminum, and copper remain in force, and the CUSMA mandatory review beginning July 1 will be conducted by an administration that has threatened 100% tariffs if Canada “makes a deal with China.” Carney’s Davos “variable geometry” doctrine — diversifying through EU-CPTPP alliances and a China canola-EV deal — is precisely the behaviour Washington views as defection from the alliance. The Arctic Summit opening in Whitehorse today, focused on sovereignty and security, underscores how Canada is reframing its strategic posture. But the fundamental vulnerability remains: 75% of exports go south, and no diversification strategy changes that within a single CUSMA review cycle.
The killing of Nemesio Oseguera Cervantes is the biggest cartel scalp since El Chapo’s arrest, and carries the same structural risk. With no obvious successor — his brother, son (“El Menchito”), and daughter are all in US or Mexican custody — the CJNG faces the same power vacuum that triggered the Sinaloa cartel’s civil war. Regional bosses across Jalisco, Michoacán, Guanajuato and Tamaulipas will compete for control, potentially fracturing the cartel into rival factions.
The timing is consequential on multiple levels. Sheinbaum faces enormous pressure from the Trump administration to show results on cartel enforcement; this operation, backed by US intelligence through the Joint Interagency Task Force–Counter Cartel, is a major deliverable. But the “kingpin strategy” Sheinbaum herself has previously criticised carries exactly the risk now unfolding: 252 roadblocks, 25 National Guard dead, and a tourism economy in crisis. Guadalajara — a 2026 World Cup host city — was a ghost town Sunday night. Puerto Vallarta was in lockdown with smoke visible from beaches. Airlines including Delta, American, Southwest, Alaska, Air Canada and Lufthansa suspended operations.
The near-term security situation will determine whether this is a decapitation success or a destabilisation trigger. If the violence subsides within days as fragmented factions regroup, Mexico can claim a strategic win. If it escalates into sustained territorial warfare, the already strained US-Mexico security relationship enters a new and unpredictable phase — particularly with the World Cup four months away.
Sovereign & Credit Pulse
| COUNTRY | KEY DEVELOPMENT | CREDIT SIGNAL |
|---|---|---|
| United States | Section 122 tariffs take effect; DHS shutdown Day 9; blizzard; Iran escalation | Fiscal drag from $142–175B refund liability; stagflation risk; shutdown eroding institutional credibility; July 24 tariff cliff |
| Canada | Defence Industrial Strategy; Q4 GDP expected flat Friday; CUSMA review July 1 | IEEPA relief positive; CUSMA exemption maintained; 232 tariffs remain; diversification underway but vulnerability persists |
| Mexico | El Mencho killed; cartel violence; tourism disruption; World Cup risk | Security situation deteriorating; near-shoring investment narrative at risk; Guadalajara World Cup hosting questioned |
| Iran | Lebanon departure order; two carrier groups; offensive doctrine declared | Extreme conflict risk; economy collapsing; regime concerned strikes could trigger renewed protests and collapse |
Key Players & Quotes
Regulatory & Policy Watch
Upcoming Events
| DATE | EVENT | SIGNIFICANCE |
|---|---|---|
| Feb 23 | Paramount–WBD waiver window expires | Best & final offer deadline; Netflix matching rights follow |
| Feb 24 | Section 122 tariffs take effect (12:01am); IEEPA codes deactivated | Trade regime change; 150-day clock begins; global effective rate drops to ~8% |
| Feb 26 | Nvidia Q4 earnings; WBD Q4 earnings | AI capex bellwether; WBD results amid bidding war; tariff relief for supply chains |
| Feb 28 | Rubio visits Israel; Canada Q4 GDP | Iran military timeline signal; Canada expected flat growth |
| Mar 2 | IAEA Board of Governors convenes | Iran censure vote; aligns with Trump’s deadline |
| Mar 18 | FOMC rate decision | Hold expected; stagflation trap persists; tariff removal may ease inflation |
| Mar 20 | WBD shareholder vote on Netflix merger | $82.7B deal approval; DOJ probe complicates timeline |
| Jul 1 | CUSMA mandatory review begins | Trilateral trade architecture at risk; Canada 85% tariff-free access |
| Jul 24 | Section 122 tariff cliff (150 days) | Congress must approve extension or tariffs expire; most important date on market calendar |
Strategic Assessment
This weekend may be remembered as the moment the threads converged: the Supreme Court fundamentally constrained executive trade power, a major cartel was decapitated, the Iran strike clock entered its final phase, and a historic blizzard hit a country already paralysed by government shutdown. Each story alone would dominate a news cycle. Together they create compounding uncertainty.The tariff transition is the slow-burning structural story. The shift from IEEPA to Section 122 changes the legal terrain but not the protectionist intent. The effective tariff rate drops from 16% to ~9–10% — genuine relief for importers and consumers. But the administration’s insistence on “virtually unchanged revenue” through alternative statutes signals that this relief is designed to be temporary. The July 24 expiration of Section 122 creates a hard deadline: either Congress codifies the tariffs (unlikely in an election year), the administration completes Section 301 investigations (aggressive timeline), or tariffs drop further. Markets should price volatility around this date now.
El Mencho’s killing is simultaneously a law enforcement triumph and a security crisis. The operation demonstrates that US-Mexico intelligence cooperation can reach the highest-value targets. But the immediate aftermath — 252 roadblocks, 25 dead National Guard, a World Cup host city in lockdown — validates precisely the criticism Sheinbaum herself has made of the kingpin strategy. The next 72 hours will reveal whether the CJNG fragments into manageable factions or descends into a succession war that makes the Sinaloa civil war look contained.
Iran is no longer a question of “if” but “when” and “how.” The Lebanon departure order is the diplomatic community’s clearest pre-strike signal. Two carrier groups, F-22 deployments, and B-2 readiness represent the largest US Middle East force posture since the 2003 Iraq invasion. The Atlantic Council’s 90% probability estimate and Stars & Stripes reporting that Iran would respond “more forcefully than last time” frame the risk. Oil at $70 is pricing restraint that may not materialise.
For Canada, the paradox sharpens. The IEEPA ruling removes the most aggressive tariffs, and CUSMA exemptions mean most trade remains tariff-free. But Carney’s diversification push — the Defence Industrial Strategy, the EU-CPTPP alliance, the China canola deal — is precisely the kind of strategic autonomy that the Trump administration views as a betrayal. The CUSMA review beginning July 1 will be the arena where Canada’s attempt to have both US market access and independent foreign policy is tested to destruction.
Bottom line: The United States enters the week with a new tariff regime, a new security crisis on its southern border, an Iran strike window that could open any day, a government that is partially shut down, and an eastern seaboard buried in snow. The convergence is unprecedented. Position for maximum volatility.