The TL;DR of Trump's SOTU

President Trump expressed hope last night that import taxes will someday replace income taxes. I'm David Brancaccio in Los Angeles. One piece of last night's State of the Union address, President Trump defending unpopular taxes on imports, his much higher tariffs, many of which were found to be illegal by the Supreme Court last week. Marketplace's Nancy Marshall-Genzer has more on that. With four Supreme Court justices sitting just feet away, President Trump condemned what he called the court's unfortunate involvement in last week's tariff case when it declared that his sweeping reciprocal tariffs are illegal. The president said that now he'll just use his remaining powers to impose import taxes, insisting that, quote, almost all countries and corporations want to keep the deal that they already made. The president also claimed that tariffs will replace income taxes and that Congress doesn't have a role to play in the tariff laws he'll now rely on. They're a little more complex, but they're actually probably better, leading to a solution that will be even stronger than before. Congressional action will not be necessary. It's already time-tested and approved. But Trump will need lawmakers' support. Last week, the president imposed 10 percent global tariffs under a part of the trade law he hasn't used before, known as Section 122. Trump says he'll raise those tariffs to 15 percent, but the Section 122 duties will expire after 150 days unless Congress extends them. Earlier this month there were bipartisan votes against Trump tariff policies I Nancy Marshall for Marketplace Imagine if you had invented a new and improved bicycle pump which sold nicely just to bike owners Then the world changes when bicycle pumps are found to be the power source driving the whole economy. That's what happened to chip maker NVIDIA of California. It made nice microchips to speed up the graphics for computer games. Then, lo and behold, versions of those chips turned out to be a great way to power the artificial intelligence revolution. NVIDIA's stock is up 1,300 percent over five years. And later today, NVIDIA reveals quarterly results. And as Daniel Ackerman reports, it sees growth opportunities outside of AI data centers. NVIDIA started out designing graphics chips that powered high-end PCs for things like video games. The company then figured out those chips could be adapted for AI. It just had the right technology at the right time. Jacob Bourne is an analyst with eMarketer. I mean, NVIDIA has just crushed the AI data center market. That is really what has pushed it to become the world's most valuable company. And while the AI boom has been very, very good for NVIDIA, Matt Bryson, Managing Director of Hardware and Semiconductors at Wedbush Securities, says investors are starting to wonder. Is there the potential that competition changes that dynamic? Competition from, say, AMD. another chipmaker that announced a partnership with Meta this week. Google and Amazon are designing data center chips of their own, so NVIDIA is trying to stay ahead by looking beyond data centers, says Angela Zeno, senior equity analyst with CFRA Research. As AI evolves I think you going to see an increasing amount of compute necessary at the edge level The edge as in actual devices that people use not data centers Running AI locally can speed up some computations. Zeno says that's mission critical for things like robots or autonomous vehicles. You're going to really need to react instantaneously, and you're going to need to have the compute power right at the device level. And for those users who don't plan to let AI drive them through busy streets, local computing can have benefits even on your standard laptop computer, says eMarketer's Jacob Born. First of all, security. He says users working with sensitive information like healthcare or financial data can more easily keep it private. Not sharing it through the cloud, but keeping it on your device. He says NVIDIA wants more of its chips on those devices as data center competition heats up. I'm Daniel Ackerman for Marketplace. For the second day in a row, the average 30-year fixed-rate mortgage has been just below 6 percent, according to Mortgage News Daily's calculation. This is a milestone for homebuyers who haven't seen below 6 for nearly three and a half years. Marketplace's Carla Javier reports. These rates are pretty close to historical averages, says Joel Kahn at the Mortgage Bankers Association Higher than where they were last decade but still lower than where they were in 22 and 23 Mortgage rates have already come down a lot over the past year says Chen Zhao at Redfin The reason why we seeing lower mortgage rates in the first place is because the economy has gotten weaker. And more uncertain. Usually when mortgage rates come down, Zhao says, demand increases. What can happen is that if you do get more demand, that means that home prices can start to go up at the same time. But this time, she says, might be different. The same forces that's bringing down mortgage rates, it's causing demand to also falter in the housing market. Buyers could come back, she says, if the economy strengthens this year, with tax cuts and if the labor market stabilizes. For those buyers, Orfei Devungi at Zillow says there's some good news. Bargaining power has kind of shifted a little bit in favor of buyers over the past year. And so that ought to really support potential homebuyers who had kind of been sidelined. Especially, he says, buyers who were outbid during the pandemic, or who got stuck when rates jumped to more than 7%. I'm Carla Javier for Marketplace. On a mortgage of, say, $500,000, the payment would be $293 a month cheaper now than a year ago, just under $3,000 a month. In Los Angeles, I'm David Brancaccio, Marketplace Morning Report, from APM, American Public Media. Ready to make the most of your money? Sign up to receive weekly tips from Marketplace designed to help you make smarter financial decisions. Plus, you'll also be the first to know about exclusive Marketplace merchandise and local events. Text MARKETPLACE to 80568 to sign up.