- In today’s CEO Daily: Diane Brady reports on key takeaways from Trump’s State of the Union speech.
- The big leadership story: FedEx wants a refund.
- The markets: Up globally, with the FTSE hitting a new record on strong earnings reports.
- Plus: All the news and watercooler chat from Fortune.
Good morning. President Donald Trump delivered his State of the Union address last night to a nation that’s increasingly skeptical about his handling of the economy and core business issues. Some key takeaways for leaders from the speech, the longest on record at one hour and 47 minutes and the first to be given amid a partial government shutdown:
On the economy: The president spoke of an economy “roaring like never before,” and it is doing relatively well, growing at an inflation-adjusted 2.2% last year while unemployment is 4.3%. But many voters are pessimistic amid tepid wage growth, with consumer sentiment running 20% below where it was when Trump was sworn in. As my colleague Geoff Colvin points out, that disconnect could create a backlash. Whether the economic growth is K-shaped or E-shaped, discontent and recession signals are brewing among the bottom 80% of consumers. One nod: a proposed $1,000 401(k) match for “forgotten American workers” without such plans. That could cost around $10 billion, a modest amount relative to the roughly $4 trillion in tax cuts over the next decade from the One Big Beautiful Bill act. Those cuts are likely to shorten the lifespan of social security, Medicare and Medicaid, and won’t help a national debt that now exceeds $38.5 trillion, with debt-to-GDP ratios on track to hit 130% within the next decade.) Takeaway: There’s an economic tailwind from tax cuts and tech, but the growing deficit and cost-of-living crisis could curb growth.
On tariffs, trade and geopolitics: Trump acknowledged the “unfortunate ruling from the Supreme Court” that rendered illegal the $133 billion in tariffs he issued last year using emergency powers, but he vowed to continue on his push, leveraging other laws. No mention of refunds. (FedEx has already sued for a full refund, Costco sued before the ruling.) Never mind that the goods and services deficit significantly increased to $70.3 billion in December or that Democrats calculate tariffs have cost the average family about $1,700 over the past year. Takeaway: Continue to stress-test those supply chains, monitor geopolitics and minimize long-term risks.
On tech, talent and the state of industry: No surprises for those who have followed the trajectory of DEI, oil and gas companies or health care under this administration. Health insurers and drugmakers continue to be vilified and Trump spoke of his focus on creating more transparency through moves like TrumpRx. But he did talk about forcing tech companies to build their own power plants for their data centers to keep energy costs in check. And I detected a softer tone on some issues, from welcoming legal immigrants to cracking down on insider trading. Takeaway: The mid-terms are coming so let the games begin. Volatility is now the norm.
Contact CEO Daily via Diane Brady at diane.brady@fortune.com
Top leadership news
FedEx sues for tariff refund
This week, FedEx became the first major company to sue the Trump administration for a full tariff refund, citing “injury” from the tariffs in a complaint filed in the U.S. Court of International Trade. Last summer, the company estimated tariffs would take a $1 billion chunk out of its operating profits for the current year.
Home Depot warns consumers aren’t investing
Despite net earnings falling 13%, Home Depot beat analyst estimates for Q4 after three straight quarters of missing them. CEO Ted Decker said customers just aren’t putting their money toward large home projects, noting that that has “everything to do with consumer confidence and sentiment, jobs' picture, overall price levels, and affordability in the economy.”
Lamborghini CEO ditches fully-EV line
The CEO of Lamborghini Stephan Winkelmann told the Sunday Times this week that the company is discontinuing its all-electric Lanzador model, saying there was “close to zero” demand in the luxury car company’s target market. “Investing heavily in full-EV development when the market and customer base are not ready would be an expensive hobby,” Winkelmann added, noting that the company will pivot to hybrid offerings instead.
The markets
S&P 500 futures are up 0.13% this morning. The last session closed up 0.77%. The STOXX Europe 600 was up 0.48% in early trading. The U.K.’s FTSE 100 was up 0.95% in early trading. Japan’s Nikkei 225 was up 2.21%. China’s CSI 300 was up 0.60%. Hong Kong’s Hang Seng was up 0.66%. South Korea’s KOSPI was up 1.91%. India’s NIFTY 50 was up 0.23%. Bitcoin was up to $65K.
Around the watercooler
How one AI company is helping businesses navigate Trump’s new tariff chaos following the Supreme Court ruling by Jeremy Kahn
Anthropic CEO Dario Amodei expresses deep discomfort with the ‘overnight’ and accidental concentration of power in the AI industry by Jake Angelo
People are getting fake news on their phones and that’s increasing the risk of a market crash by Nick Lichtenberg
Sam Bankman-Fried is waging a social media campaign for a pardon—but President Trump will not give him one, says the White House by Leo Schwartz
CEO Daily is compiled and edited by Joey Abrams, Claire Zillman and Lee Clifford.
