TD Securities said markets are watching President Trump’s State of the Union Address at 9pm EST, along with comments from several Federal Reserve officials. The speakers include Goolsbee, Bostic, Waller, Cook, Barkin, and Collins. The bank said trading could be choppy ahead of the address. Investors will be listening for updates on the economy, tensions with Iran, and a Supreme Court ruling on the legality of IEEPA. TD Securities also noted a US 2-year Treasury auction scheduled for the afternoon.

Consumer Confidence In Focus

TD Securities expects the Conference Board consumer confidence index to print at 85.5, below the 87.0 consensus forecast. This follows a drop to 84.5 in January. It said Morning Consult data does not show a clear rebound in sentiment at the start of February. It also cited sharp moves in equities and higher petrol prices during the first half of the month. Another key item is the “labour differential,” which TD Securities said points to weaker job-finding expectations, consistent with the New York Fed. It added that hiring has stayed muted even as the labour market has begun to stabilise. Markets are now focused on this week’s consumer confidence report and remarks from several Federal Reserve officials. We expect the Conference Board index to miss expectations and potentially come in below 102.0. This view reflects recent equity market volatility and higher prices at the pump.

Positioning And Volatility

Markets saw similar choppiness in 2025, when political events often triggered short-term swings ahead of major economic data. The political backdrop is different today, but investors are still cautious as they position for this week’s key risk events. Several Fed officials, including Vice Chair Jefferson and Governor Waller, are scheduled to speak. We expect February consumer confidence to be weaker than the consensus forecast, after falling sharply to 101.5 in January from a late-2025 high. The S&P 500 has pulled back about 4% in recent weeks, which often weighs on household sentiment. EIA data also shows the national average gasoline price has risen to $3.45 per gallon, adding pressure on consumers. The labour market will likely be a major driver of the report, especially the “labour differential” between jobs being plentiful versus hard to get. The latest JOLTS report showed job openings have fallen for three straight months, pointing to softer demand for workers. This slower hiring trend, which began in late 2025, may keep pressure on the Fed to lean more dovish. Given this setup, traders may look at positioning for downside risk in US equities and a weaker dollar. Buying puts on the SPY or QQQ ETFs can help hedge against a negative confidence surprise. In FX, options strategies that target a drop in the Dollar Index (DXY), such as buying puts or put spreads, may be timely. We also expect implied volatility to rise ahead of the data releases and Fed speeches. That could make strategies like buying VIX calls or using long straddles on major indices more attractive if markets move sharply. These trades benefit from a large move in either direction, reflecting the current uncertainty. Create your live VT Markets account and start trading now.

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