Trump is declaring victory a breeze, but Republicans are panicking: Does he really have the goods?
2026-02-25 15:44:33
Trump delivered the longest State of the Union address in U.S. history, with the speech taking place from 10:00 to 12:00 Beijing time, which coincided with Asian market trading hours.
He emphasized the United States' comprehensive economic and diplomatic leadership, highlighted domestic employment and manufacturing prosperity, and attempted to reverse the decline in public opinion support by doing so. He also called on voters to support the Republican Party in the November midterm elections to maintain policy continuity.
Republicans are facing a tough situation in the 2026 midterm elections. Although they hold a narrow majority in the House of Representatives (218-214) and the Senate (53-47), concerns about the economy and the backlash against Trump’s deportation policies have given Democrats renewed hope.
Some within the Republican Party worry that Trump, as the party's most influential figure, could be detrimental in a fiercely contested election campaign because he demands absolute loyalty even from members of Congress in key districts.
Polls show that approximately 41% of respondents currently approve of Trump's job performance, while 57% disapprove. The gap between disapproval and approval has widened from 2 percentage points in March of last year to 16 percentage points.
In some segments, Trump attempted to appeal to bipartisan patriotism, introducing several unexpected guests, including U.S. military heroes, former political prisoners released after his administration ousted Venezuelan President Maduro, and the U.S. men's ice hockey Olympic gold medal team.
"Our country has won again. In fact, we've won so much that we don't know what to do with it."
"People ask me, 'Please, Mr. President, we've won too much, we can't keep going,'" Trump said before introducing the team.
Currently, Trump is indeed comfortably positioned in the 35-45% range in the polls. Republican support is stable, while Democratic opposition is almost unanimously strong. For Trump in the midterm elections, the polls suggest a stable base with a high lower limit, but also a very low upper limit.
In response to the Supreme Court's rejection of his tariff policy, Trump stated that the ruling was "regrettable" and insisted that he would continue to pursue import tariffs through alternative legislation, without the need for congressional legislation.
He also claimed that the cost of tariffs was borne by overseas entities, which contradicted the actual logic of market transmission.
This address did not focus on addressing issues such as price control and the cost of living, while polls show that inflation and economic governance have become weaknesses in the administration.
Coupled with the slowdown in US economic growth in the fourth quarter of last year, the market is worried that the high costs brought by tariffs will continue to drag down the economy and employment, and the political uncertainty of the midterm elections may also exacerbate market volatility.
Markets are generally concerned that forcibly implementing tariffs will further push up domestic prices, exacerbate inflation stickiness, and limit the Federal Reserve's room for interest rate cuts.
Trump launched a retirement savings support program, which proposes to provide government subsidies of up to $1,000 to people without employer-sponsored accounts in order to boost residents' confidence. However, the plan did not disclose the source of funding or implementation details, and its short-term effect on boosting the market is limited.
At the same time, he demanded that AI technology companies pay higher electricity prices for their data centers to alleviate regional electricity cost pressures. This move will increase the operating costs of technology companies and have a structural impact on the US stock technology sector.
During the speech, the US deployed two aircraft carriers to the Middle East, and tensions between the US and Iran continued to rise.
Trump reiterated that the U.S. had “destroyed” Iran’s nuclear program in the June strikes and claimed that Iran was developing missiles capable of striking the United States, but provided no evidence.
On the one hand, Trump stated that he would prioritize diplomatic solutions to the US-Iran issue, and on the other hand, he declared that he would never allow Iran to possess nuclear weapons. Geopolitical risks have increased significantly, continuing to provide support for safe-haven assets such as gold and silver.
Gold also rose by more than 1% during Trump's speech.
Dozens of Democrats boycotted Trump's speech, with some leaving after it began, leaving empty seats.
Democrats, including Rashida Tlaib and Ilhan Omar, clashed with Trump, with Omar accusing his immigration policies of causing American deaths.
Virginia Governor Abigail Spanberg criticized Trump’s immigration policies and tariff measures in a Democratic rebuttal speech.
Spanberg also stated that Trump's tariff policies have already caused economic damage, and that despite the Supreme Court ruling many tariffs illegal, Trump still plans to implement new tariffs.
This State of the Union address further solidified the combination of trade protectionism, a tough geopolitical stance, and high policy uncertainty.
The current dollar index indicates that Trump believes the US has won, but the market is choosing to sell dollars. The core trading logic of the market is ultimately returning to the repricing of interest rate cut expectations and the recovery of risk premiums.
As for the market reaction, since the State of the Union address did not release specific fiscal arrangements and did not focus much on geopolitical issues, the US dollar index was not significantly boosted and ultimately fell by 0.2%, while spot gold rose by 1%.
(US Dollar Index Daily Chart)
(Spot gold daily chart, source: FX678)
He emphasized the United States' comprehensive economic and diplomatic leadership, highlighted domestic employment and manufacturing prosperity, and attempted to reverse the decline in public opinion support by doing so. He also called on voters to support the Republican Party in the November midterm elections to maintain policy continuity.
Republicans are facing a tough situation in the 2026 midterm elections. Although they hold a narrow majority in the House of Representatives (218-214) and the Senate (53-47), concerns about the economy and the backlash against Trump’s deportation policies have given Democrats renewed hope.
Some within the Republican Party worry that Trump, as the party's most influential figure, could be detrimental in a fiercely contested election campaign because he demands absolute loyalty even from members of Congress in key districts.
Polls show that approximately 41% of respondents currently approve of Trump's job performance, while 57% disapprove. The gap between disapproval and approval has widened from 2 percentage points in March of last year to 16 percentage points.
In some segments, Trump attempted to appeal to bipartisan patriotism, introducing several unexpected guests, including U.S. military heroes, former political prisoners released after his administration ousted Venezuelan President Maduro, and the U.S. men's ice hockey Olympic gold medal team.
"Our country has won again. In fact, we've won so much that we don't know what to do with it."
"People ask me, 'Please, Mr. President, we've won too much, we can't keep going,'" Trump said before introducing the team.
Currently, Trump is indeed comfortably positioned in the 35-45% range in the polls. Republican support is stable, while Democratic opposition is almost unanimously strong. For Trump in the midterm elections, the polls suggest a stable base with a high lower limit, but also a very low upper limit.
Further hardening of tariff policies could exacerbate inflation and disrupt expectations of interest rate cuts.
In response to the Supreme Court's rejection of his tariff policy, Trump stated that the ruling was "regrettable" and insisted that he would continue to pursue import tariffs through alternative legislation, without the need for congressional legislation.
He also claimed that the cost of tariffs was borne by overseas entities, which contradicted the actual logic of market transmission.
This address did not focus on addressing issues such as price control and the cost of living, while polls show that inflation and economic governance have become weaknesses in the administration.
Coupled with the slowdown in US economic growth in the fourth quarter of last year, the market is worried that the high costs brought by tariffs will continue to drag down the economy and employment, and the political uncertainty of the midterm elections may also exacerbate market volatility.
Markets are generally concerned that forcibly implementing tariffs will further push up domestic prices, exacerbate inflation stickiness, and limit the Federal Reserve's room for interest rate cuts.
Limited Impact of New Policy: Retirement Subsidies and AI Electricity Prices Have a Structural Impact
Trump launched a retirement savings support program, which proposes to provide government subsidies of up to $1,000 to people without employer-sponsored accounts in order to boost residents' confidence. However, the plan did not disclose the source of funding or implementation details, and its short-term effect on boosting the market is limited.
At the same time, he demanded that AI technology companies pay higher electricity prices for their data centers to alleviate regional electricity cost pressures. This move will increase the operating costs of technology companies and have a structural impact on the US stock technology sector.
Escalating geopolitical risks: Middle East situation benefits safe-haven assets
During the speech, the US deployed two aircraft carriers to the Middle East, and tensions between the US and Iran continued to rise.
Trump reiterated that the U.S. had “destroyed” Iran’s nuclear program in the June strikes and claimed that Iran was developing missiles capable of striking the United States, but provided no evidence.
On the one hand, Trump stated that he would prioritize diplomatic solutions to the US-Iran issue, and on the other hand, he declared that he would never allow Iran to possess nuclear weapons. Geopolitical risks have increased significantly, continuing to provide support for safe-haven assets such as gold and silver.
Gold also rose by more than 1% during Trump's speech.
Democratic Party's reaction
Dozens of Democrats boycotted Trump's speech, with some leaving after it began, leaving empty seats.
Democrats, including Rashida Tlaib and Ilhan Omar, clashed with Trump, with Omar accusing his immigration policies of causing American deaths.
Virginia Governor Abigail Spanberg criticized Trump’s immigration policies and tariff measures in a Democratic rebuttal speech.
Spanberg also stated that Trump's tariff policies have already caused economic damage, and that despite the Supreme Court ruling many tariffs illegal, Trump still plans to implement new tariffs.
Overall market impact: Uncertainty dominates trading theme
This State of the Union address further solidified the combination of trade protectionism, a tough geopolitical stance, and high policy uncertainty.
The current dollar index indicates that Trump believes the US has won, but the market is choosing to sell dollars. The core trading logic of the market is ultimately returning to the repricing of interest rate cut expectations and the recovery of risk premiums.
As for the market reaction, since the State of the Union address did not release specific fiscal arrangements and did not focus much on geopolitical issues, the US dollar index was not significantly boosted and ultimately fell by 0.2%, while spot gold rose by 1%.
(US Dollar Index Daily Chart)
(Spot gold daily chart, source: FX678)
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