Will the State of the Union deliver another TACO moment?

The phrase “TACO” or “Trump Always Chickens Out” has been bandied about every time the US president announces strong policy measures, only to be withdrawn following a strong negative reaction from the market.

So will Donald Trump’s State of the Union address lead to a new round of TACO trade? Investors have largely ignored Trump’s imposition of Section 122 tariffs around the world, so there is little incentive for the U.S. president to water down tariffs, but clarity on how tariffs will work could be a boon for markets.

Experts told CNBC that “people are now used to his little outbursts” and that investors have “big issues to grapple with” such as artificial intelligence.

There is little clarity as to what the new Article 122 obligations will be. Currently, the tariff is set at 10% in released Customs and Border Protection documents, but President Trump said on Saturday that the tariff would increase to 15% “effective immediately.”

On Tuesday, Reuters reported that the tariffs would be 10%, but the White House said it was “working” to raise them to 15%, without giving a firm timeline.

In the words of Bernd Lange, the EU’s top trade lawmaker: “We need clarity, and this is also my clear request to the US government.”

If President Trump wants to make something clear, his State of the Union address on Wednesday morning, Asian time, will be the perfect opportunity.

According to the poll, 57% of respondents said the economy is what they most want President Trump to talk about in his speech, especially after the Supreme Court’s tariff ruling.

While investors wait for clarity on tariffs, investors are returning to betting on software stocks to recover after Anthropic revealed a new partnership on Tuesday, quelling some fears that the sector will be replaced by artificial intelligence.

Anthropic has launched a new update to Claude Cowork that allows businesses to integrate productivity tools into apps like Slack, FactSet, and Google’s Gmail.

The rally was aided by a recovery in the U.S. market and was also fueled by a surge in AMD stock after Metaplatforms announced a multi-year deal with the semiconductor company.

Bernd Lange, chairman of the European Parliament’s international trade committee, said the United States was violating European trade agreements and the European Union was ready to retaliate if necessary. The European Parliament announced on Monday that it had suspended work on ratifying the US-EU trade deal, while seeking clarity from the White House on whether it still stands.

US President Donald Trump’s State of the Union address will focus on the economy and immigration. White House press secretary Caroline Levitt said the speech highlighted how Trump “has brought our country back from the brink of disaster over the past year.”

Anthropic accused three Chinese AI companies of conducting a coordinated campaign to extract information from its models. DeepSeek, Moonshot AI, and MiniMax (the three companies in question) bombarded Claude with a large number of prompts specifically designed to train their own models, according to the statement.

U.S. stocks rallied on Tuesday, supported by software stocks. The S&P 500 rose 0.77% and the Nasdaq Composite rose 1.04%. The Dow Jones Industrial Average rose 0.76%.

(PRO) Attractive yields on bonds. Opportunities are still open for investors to earn attractive income in the bond market, but it won’t last forever, according to BlackRock’s Rick Rieder.