What Wall Street will be watching in Trump's State of the Union address

When President Trump addresses the nation tonight in his first State of the Union address, Wall Street will focus its attention on what he says about key economic issues ranging from infrastructure spending to trade policy.

In his speech, Trump is expected to trumpet the successes of his first year in office, with the passage of a landmark tax cut law, a booming stock market up until this week's selloff and a resurgent economy likely to get top billing. Trump, of course, has touted the stock market's record-setting run since he took office, but the Dow was down more than 400 points at one point Tuesday, its biggest one-day point drop since June 2016.

What Wall Street wants to know now is what's next on the president's economic agenda, and what business-related items he will be pushing for most aggressively in his second year in the Oval Office.

Here are things Wall Street is watching for in tonight's 9 p.m. ET address:

Setting a different tone

Trump's first year in the White House was marked by rancor between the two political parties. Wall Street would like Trump to strike a more conciliatory tone and emphasize the importance of Republicans and Democrats working together to further his economic agenda.

"We expect ... the president to strike a more bipartisan and inspirational tone," Dan Clifton, a Washington policy analyst at New York-based investment firm Strategas Research Partners, told clients in a report.

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Next policy moves

Trump's biggest success has been getting the corporate tax rate slashed to 21% from 35% and cutting red tape that, he argues, was holding businesses back. But Wall Street wants more pro-growth initiatives to be rolled out to provide further ballast to the economy.

Investors are hoping Trump commits to a sizable infrastructure spending plan to modernize and upgrade the nation's aging roads, bridges and airports, a move he promised during his campaign and which is seen providing a further boost to the job market and businesses.

"Perhaps the most anticipated new initiative to come from the speech will be more details on the president's infrastructure program," Tom Block, a political policy analyst at Wall Street firm Fundstrat Global Advisors, noted in a report.

Block says markets expect Trump to unveil an infrastructure program that could cost as much as $1 trillion. 

Spending on defense is also expected to be of interest to investors, as more military spending to combat ISIS and upgrade areas of the armed services would benefit defense-related companies' stock. 

Other parts of the market that could be impacted by Trump's latest economy-boosting spending initiatives include companies in transportation, capital goods and equipment makers, as well as banks and energy firms, analysts say.

Trade talk

Wall Street expects Trump to use similar language used at his recent speech at the World Economic Forum in Davos, Switzerland, last week where he stressed the U.S. is seeking "fair and reciprocal" trade from global trading partners and that his "America first" policy doesn't mean "America alone."

And while investors don't necessarily expect the president to announce a specific decision on whether the nation will amend or withdraw from NAFTA, the U.S. trade agreement with Mexico and Canada, Trump's message will be closely analyzed.

"Trade will be a key issue," says Clifton.

The auto industry, Goldman Sachs notes, would "face the most likely headwinds" if trade with Mexico was hurt by a trade fight.

Investors will also be listening for any signs that Trump plans on slapping additional tariffs on its trading partners, following the recent tariffs placed on solar panels and washing machines imported to the U.S.

Investors are most interested in "pro-growth initiatives that will boost the confidence of consumers and businesses," says Joe Quinlan, chief market strategist at U.S. Trust.