Wall St Rises After US Supreme Court Ruling Against Trump Taxes
U.S. stocks rose on Friday, with the Nasdaq leading gains after the Supreme Court struck down President Donald Trump’s global tariffs, giving relief to investors after weaker-than-expected economic data earlier in the day.
The US Supreme Court, with a conservative majority, ruled 6-3 against his global tax, enacted under a federal law designed for national emergencies. Trump’s April 2nd “Independence Day” tariffs included a basic 10% tariff on all imports into the United States and additional duties of 15% to 50% in many countries, many of which were renegotiated and later reduced.
Trump called the decision “disgraceful” and said he had a backup plan, sources told Reuters.
Although stock markets have recovered from the sell-off caused by last year’s tax announcement, companies and consumers are still struggling with falling jobs.
Shares of US toy makers Hasbro and Mattel, online furniture retailer Wayfair, Pottery Barn owner Williams-Sonoma and luxury furniture retailer RH – some of the companies hit by the charges – rose after the decision.
Solar companies including First Solar and Canadian Solar and homebuilders Pultegroup and Lennar also rose.
“It’s too early to do a broad assessment of access… at first the view would be that this should help alleviate some of the inflationary pressures, if the Supreme Court’s decision has staying power,” said Michael James, a stockbroker at Rosenblatt Securities in Los Angeles.
“That’s why you’re seeing a significant rally not only in the market but in terms that are directly related to consumers.”
Thousands of companies around the world have filed lawsuits against Trump’s sweeping tariffs and are seeking refunds for the jobs they paid. There is a risk of more than $175 billion in US tax revenue that will need to be repaid, according to Penn-Wharton Budget Model economists.
At 11:56 a.m. ET, the Dow Jones Industrial Average rose 114.02 points, or 0.23%, to 49,509.18, the S&P 500 gained 43.72 points, or 0.64%, to 6,905.61, and the Nasdaq Composite gained 0.5 points to 13.56. 22,933.03.
Data earlier in the day showed US economic growth slowed more than expected in the fourth quarter, while separate readings showed inflation picked up in December. Traders are more conservative in betting the Federal Reserve will deliver its next interest rate cut in June.
Seven of the S&P’s 11 sectors were trading higher, with the telecommunications services index leading, boosted by Alphabet’s 4.5% rise.
High valuations and fears of AI disruption have recently weighed on technology and other sectors as investors question whether AI’s big investment is paying off.
Private equity firm Blue Owl Capital shed 2.6% on the day after its plan to recoup cash from a small debt fund and permanently halt redemptions at one of the funds rattled investors and dragged down peers.
Akamai Technologies fell 10.6% after the cloud company forecast first-quarter adjusted profit below Wall Street estimates.
Advancing issues outnumbered decliners by a ratio of 1.42-to-1 on the NYSE and by a ratio of 1.29-to-1 on the Nasdaq.
The S&P 500 posted 29 new 52-week highs and five new lows, while the Nasdaq Composite recorded 64 new highs and 91 new highs.
(Reporting by Sruthi Shankar and Shashwat Chauhan in Bengaluru; Additional reporting by Sinead Carew in New York; Editing by Pooja Desai)
