SOTU & Sectors Today

I'm gonna be honest, I've never been one to care about the news. This might change slightly for me now that I'm doing this. Last week we had the PCE and last night we had the State of the Union (SOTU), two "news" pieces that slightly shifted the dynamic of the market.

Today I'll focus on how SOTU changed the tone of the market on February 25, 2026. Before we dig into it, here's a quick recap: I exited part of my XLE contract last week to secure initial investment, then sold the remainder yesterday when XLE dropped to $54.40. I've also been looking at XLI for my next move, and currently hold Oracle and Nvidia as separate investments.

During SOTU, the president announced the average gasoline price across the country, and while his numbers were slightly off, the average is still relatively low. In addition, he also mentioned that the energy cost could be expected to go down in the near future. Now, it's important to know this because XLE is the energy sector and we can easily see how last night's SOTU had an effect on it.

In the chart above, we can observe how XLE performed today, on February 25, 2026. As shown above, XLE opened above resistance price $55 and immediately dropped and remained below $55. While the change may not have been drastic for the price action, it would've been severe for my contract as the theta decay would've inhaled the remaining capital I still had.

Next, XLI was affected with the 15% imposed tariffs. This indicates that the industrial sector would have to pay more for materials and resources. This change alone created a shift on what we observed yesterday. Let's look at today's behavior for XLI:

In the above we see a purple box for today's price where it decreased.

It makes sense that XLI and XLE had a red day post SOTU. The good news is that XLI RSI is still under 60, which may indicate a reversal, but I'll like to keep a close eye tomorrow. At the same time, it seems that technology was up today indicating another sector rotation. Institutional investors likely saw the tariff confirmation as a signal to 'de-risk' and rotate capital into sectors with less trade-war exposure, like Software.

Today was an interesting day overall. I don't have any negative emotions, I understand that I need to be on top of my next contract. Slowly I'm learning that this is a new territory and I need to become familiar with relevant news that will affect my investments and contracts. Overall, today was more for my self knowledge before jumping onto my next trade and I feel happy about it, but I need to grind