Stocks rose on Friday after the Supreme Court ruled that Donald Trump’s tariffs are illegal.
US stocks reversed earlier losses after the Supreme Court struck down the sweeping trade policy the president unveiled last April. The decision is a major update to an issue that’s been a source of intense uncertainty and volatility for much of the last year, and will also raise new questions about how Trump might pursue his landmark policy push.
Members of Trump’s team have said that the administration has “lots” of other options to implement tariffs if the Supreme Court struck them down.
“This means that while we could see some near-term disruption, his long-term tariff strategy is unlikely to be derailed so long as the White House can replicate the regime through alternative methods,” Matthew Ryan, head of market strategy at financial services firm Ebury, said.
Here’s where major indexes stood around 2 p.m. ET on Thursday:
For investors, the news on tariffs is outweighing a disappointing update on economic growth, while PCE inflation, the Fed’s preferred inflation measure, heated up faster than expected. GDP grew 1.4% year-over-year last quarter, falling far short of estimates, while PCE rose 0.4% in December, slightly above the anticipated 0.3% gain.
“The market just totally erupted,” Jose Torres, a senior economist at Interactive Brokers, told Business Insider. “In the short run, it’s good for corporate earnings.”
Investors are also eyeing potential corporate stimulus if the US refunds firms the tariffs they’ve paid, according to Michael Brown, a senior research strategist at Pepperstone.
Still, there’s a chance investors may be getting ahead of themselves. While the SCOTUS ruling has been a “blow” to the Trump administration, the president is likely to try for a different way to impose his tariffs, Brown told Business Insider.
“I think in the grand scheme of things, from a tariff perspective, nothing is likely to change particularly much,” he said.
“The stock market has been trying to get out of this malaise that it’s been in,” Torres said, pointing to the recent sell-off that’s spread from the software sector to areas like insurance and real estate. “Investors really said, ‘Oh wow. This is materially great for stocks, so let’s try to push the market higher.'”
