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Trump reiterates tax cut commitment

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U.S. should "get rid of" CHIPS Act, Trump tells Congress

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Pledge to impose reciprocal tariffs concerns investors

(Updates throughout with speech, fresh quotes, updated prices)

By Suzanne McGee and Carolina Mandl

March 4 (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."