Dow Jones, S&P 500, Nasdaq gains after Supreme Court tariff ruling: Stocks edged higher Friday after the Supreme Court ruled against US president Donald Trump’s sweeping tariffs, giving a lift to retailers and other companies that had struggled with rising import and manufacturing costs tied to the duties.
Dow Jones Climbs After Supreme Court Tariff Ruling – DJIA Today Recovers From Early Losses After Economic Data Miss
The Dow Jones Industrial Average rose 93.81 points, or 0.2%, recovering from an earlier 200-point drop sparked by disappointing economic data and the S&P 500 gained 0.3%, while the Nasdaq Composite climbed 0.5%, as per a CNBC report.
The Supreme Court struck down much of Trump’s tariff policy under the International Emergency Economic Powers Act, ruling 6-3 that the law “does not authorize the President to impose tariffs.” The decision did not address whether previously paid tariffs would need to be refunded.
Also read: Supreme Court tariff ruling: 6-3 decision blocks Trump tariffs under IEEPA – what does it mean for Trump administration?
S&P 500 Gains as Investors React to Supreme Court Decision and Nasdaq Rises 0.5% as Tech Shares Help Lift Broader Market
Retail and apparel stocks reacted quickly. Shares of Nike and Deckers Outdoors jumped 2% each. Home Depot and Five Below also moved higher, and Caterpillar reversed earlier losses. The State Street SPDR S&P Retail ETF (XRT) briefly surged as much as 1.8% before giving back some gains.
DJIA Today: Retail and Apparel Stocks Lead the Move Higher
Among the retailers that climbed were Floor & Decor, Crocs, Abercrombie & Fitch, RH, and Wayfair, companies that had been hit hard by the levies.
The Footwear Distributors and Retailers of America welcomed the ruling, calling it “an important step toward creating a more predictable and competitive environment for American businesses and consumers,” adding, “By removing these widespread tariffs, the footwear industry can redirect billions of dollars toward innovation, job creation, and affordability for families across the country,” as quoted by CNBC.Also read: Word of the day: Dowager
US Stock Market Today: Market Reaction Muted as Wall Street Awaits White House Next Move
However, the broader market reaction was relatively muted. Wall Street had largely expected the court’s decision, and economists believe the White House may try to reapply similar tariffs through other means.
Jed Ellerbroek, portfolio manager at Argent Capital Management said, “The next question is, then, ‘What is President Trump going to do about this?’” adding, “He has other options to impose tariffs — I assume he will use those. So, I think that this is an intermediate step in a pretty long story, and I guess the ball is in President Trump’s court now,” as quoted by CNBC.
GDP, PCE Report and Government Shutdown Weigh on Sentiment
Earlier in the day, investors were rattled by weaker-than-expected economic data. Gross domestic product grew 1.4% in the fourth quarter, well below the 2.5% gain economists had anticipated. The third quarter had seen a much stronger 4.4% increase.
The Commerce Department said the record-breaking government shutdown, which lasted through the first half of the fourth quarter, shaved about 1 percentage point off economic growth.
Inflation data offered little relief. The personal consumption expenditures price index, the Federal Reserve’s preferred inflation gauge, showed inflation held steady in December. Core PCE, which excludes food and energy, came in at 3%, matching expectations but remaining well above the Fed’s 2% target.
Meanwhile, alternative asset managers continued to struggle. Blue Owl Capital fell another 1% after gating redemptions from one of its private credit funds earlier in the week. Blackstone and Ares Management also dropped about 1% each, as concerns grow over potential losses tied to private credit, particularly in the troubled software sector.
Dow Jones, S&P 500 and Nasdaq Eye Weekly Gains
Despite the mixed signals, the major indexes are on track for modest weekly gains. The Dow is heading for a 0.1% increase, the S&P 500 is up about 0.7% for the week, and the Nasdaq is set to snap a five-week losing streak with a gain of more than 1%.
FAQs
How much did the Dow gain?
The Dow rose 93.81 points, or 0.2%, recovering from earlier losses.
What did the Supreme Court rule?
The court ruled 6-3 that IEEPA does not authorize the president to impose tariffs.