(Reuters) -Investors took comfort in U.S. President Donald Trump's commitment to cutting taxes in a major address to Congress but voiced concerns about his continued focus on tariffs and a proposal to ditch a semiconductor chip manufacturing subsidy.

The president's remarks come at a pivotal point for markets, as the post-election wave of exuberance and excitement has given way to anxiety that Trump's policies are weighing on economic growth and contributing to inflation.

Trump urged Congress to extend his 2017 tax cuts on Tuesday, a proposal which investors have welcomed. Trump, however, said he would impose reciprocal tariffs on April 2, a move that could roil financial markets.

"The volatility in the market around tariffs is likely to continue, because it doesn't look like there's going to be a change in policy or the U.S. is ready to back off of these tariffs," said Anthony Saglimbene, chief market strategist at Ameriprise Financial, who said the fact that Trump mentioned tax cuts again is a positive for markets.

Major U.S. stock indexes fell in a volatile session on Tuesday after Trump's new 25% tariffs on imports from Mexico and Canada took effect, along with a doubling of duties on Chinese goods to 20%.

The benchmark S&P 500 has now given up its gains for the year and is in negative territory for 2025. The tech-heavy Nasdaq Composite at one point on Tuesday was down more than 10% from its mid-December peak, before recovering somewhat.

During Trump's speech the dollar and U.S. stock futures recouped a little of their losses.

"Cutting taxes ... will incentivize business spending as long as corporations believe the consumer will be there to spend," said Michael Schulman, chief investment officer at Running Point Capital Advisors. "Investor reaction should overall be positive since disposable income may rise when these policies are passed."

Art Hogan, strategist at B. Riley Wealth, said the one concerning aspect of the president's comments was on tariffs.

Another concern to some was that Trump said on Tuesday that U.S. lawmakers should get rid of a landmark 2022 bipartisan law to give $52.7 billion in subsidies for semiconductor chips manufacturing and production and use the proceeds to pay debt.

"The CHIPS Act pullback is a significant shift," said Charu Chanana, chief investment strategist at Saxo.

If followed through, that stance could impact investment plans, supply chain resilience, and U.S. competitiveness in chip manufacturing, she said.

"Companies that have been counting on government support for domestic production might reconsider expansion plans, while foreign rivals could gain an edge. Market reaction will depend on whether this is political posturing or a genuine policy shift."