U.S. stocks rose sharply on Friday following the Supreme Court’s decision to strike down the majority of President Donald Trump’s tariff policies, offering relief to companies that had faced higher costs and easing concerns about persistent inflation. The S&P 500 climbed 0.6%, the Nasdaq gained 0.7%, and the Dow Jones Industrial Average added 196 points, or 0.4%, bouncing back from earlier losses tied to disappointing economic data.
The Supreme Court ruled that the International Emergency Economic Powers Act does not grant the President authority to impose tariffs, invalidating most of Trump’s sweeping trade measures. In response, Trump announced plans for a new 10% “global tariff,” saying he would pursue a stronger approach than originally attempted.
Shares of companies heavily reliant on Chinese imports, including Amazon, Home Depot, and Five Below, rose on the news. Amazon, which sources around 70% of its goods from China, jumped 2% as investors welcomed relief from tariff-driven price increases. Analysts noted that avoiding higher import costs could help maintain consumer demand and ease pressures on prices.
Despite the rally, uncertainties remain over whether companies that already paid higher tariffs may receive refunds, a question the Supreme Court did not address. Some experts suggest potential reimbursements could act as a form of economic stimulus.
The market’s optimism came despite weaker-than-expected GDP growth of 1.4% in the fourth quarter, dragged down by the record-long government shutdown, and steady core inflation at 3%, above the Federal Reserve’s 2% target. Overall, the Dow is set for a slight weekly gain, the S&P 500 for a 1% rise, and the Nasdaq appears poised to break a five-week losing streak.
