Washington: Global financial markets surged after the Supreme Court of the United States delivered a 6–3 ruling striking down most of President Donald Trump’s signature tariffs.
Following the decision, the S&P 500 climbed 0.6%, while the Nasdaq advanced 1%. The rally extended beyond the United States, with European shares, as well as markets in South Korea and India, posting notable gains.
Companies With Heavy Tariff Exposure Lead Gains
The strongest market reaction was seen among companies heavily exposed to tariffs, particularly those reliant on imports from China.
E-commerce giant Amazon rose 2%, reflecting investor optimism as nearly 70% of its goods are sourced from China. Footwear brands Deckers Outdoor, Birkenstock, and Crocs each gained more than 2%.
Furniture retailers also recorded strong performance, with Wayfair and Floor & Decor surging approximately 4%.
Uncertainty Over Tariff Refunds
Despite the positive market response, uncertainty remains regarding the potential repayment of billions of dollars in tariffs already collected.
Justice Brett Kavanaugh noted that the ruling “says nothing about whether, and how, if so, the Government should go about returning the billions of dollars that it has collected.”
Concerns have emerged that possible refunds could widen the federal deficit. Reflecting these worries, U.S. Treasury yields edged higher, with the 10-year yield rising 2 basis points to 4.096%. Meanwhile, the U.S. dollar weakened slightly.
Decision Comes Amid Soft Economic Data
The court’s ruling comes at a time of underwhelming economic performance. Fourth-quarter GDP expanded at an annualized rate of 1.4%, falling short of expectations, partly due to the impact of a government shutdown.
Core inflation remained elevated at 3%, still above the Federal Reserve’s 2% target, underscoring continued economic challenges despite the market’s upbeat reaction to the court’s decision.
