Wall Street Steady After Supreme Court Blocks Trump Tariffs as Investors Weigh Economic Signals

BY Rosemary

Wall Street remained composed Friday after the U.S. Supreme Court struck down former President Donald Trump’s sweeping tariff plan, a policy that had rattled global markets when first introduced last year. Stocks drifted in mixed trading as investors balanced the court’s decision against fresh data pointing to slowing economic growth and persistent inflation.

By midday, the S&P 500 was up 0.1%, having oscillated between modest gains and losses earlier in the session. The Dow Jones Industrial Average fell 125 points, or 0.3%, while the Nasdaq Composite gained 0.3%. The restrained movements reflected a market that had largely anticipated the court’s ruling and was reluctant to make bold moves amid broader economic uncertainty.

The Supreme Court’s decision invalidated Trump’s proposed “reciprocal” tariffs, which had been designed to match duties imposed by other nations on U.S. goods. When first unveiled, the plan triggered sharp market volatility amid concerns that escalating trade tensions would raise costs for businesses and consumers, stoke inflation and slow global growth.

Analysts said the muted reaction on Friday suggested that many investors had already priced in the likelihood of such a ruling. Brian Jacobsen, chief economic strategist at Annex Wealth Management, said financial markets appeared to be treating the decision as a temporary reprieve rather than a definitive end to trade-related risks.

“This will give some short-lived relief as it just delays the inevitable of tariffs from a different authority,” Jacobsen said, predicting that a future administration could pursue more targeted tariffs focused on specific countries or industries.

In the bond market, Treasury yields edged only slightly higher. The relatively small moves underscored investor ambivalence about the ruling’s broader implications. If markets believed the decision would meaningfully reduce inflationary pressure, yields might have fallen more sharply. Conversely, if investors feared that the loss of tariff revenue would widen the federal deficit, long-term yields could have climbed. Instead, the yield on the 10-year Treasury held steady at 4.08%, while the two-year yield, which is more sensitive to expectations for Federal Reserve policy, ticked up marginally to 3.48%.

Individual stocks reflected the shifting mood. Shares of Ralph Lauren initially swung from losses to a 3.3% gain following news of the court’s decision, as investors weighed the reduced risk of import costs squeezing profit margins. However, the rally proved fleeting, and the stock was down 0.1% by midday. The company’s shares had fallen sharply in April of last year—dropping nearly 23% in four days—after the tariff announcement fueled fears about higher sourcing expenses.

In commodities markets, gold briefly dipped before recovering, signaling that investors were not making significant shifts into or out of traditional safe-haven assets. The U.S. dollar edged lower against the euro and other major currencies, while European stock indexes added modest gains to earlier advances.

Despite the legal setback for Trump’s tariff policy, investors remained cautious, mindful that trade tensions could resurface in other forms. The broader focus for many market participants earlier in the day had been a pair of discouraging economic reports showing slowing U.S. growth alongside accelerating inflation. Together, the data highlighted the delicate balancing act facing the Federal Reserve.

Traders continue to expect the Fed to cut interest rates at least twice before the end of the year, according to data from CME Group, although some have pushed back expectations for the first reduction to later in the summer. Lower rates could support economic growth and buoy stock prices, but they also risk reigniting inflationary pressures. Federal Reserve officials have signaled they want clearer evidence that inflation is easing before moving to reduce borrowing costs further.

Corporate earnings also drove significant moves. Akamai Technologies dropped 11%, among the sharpest declines on Wall Street, despite reporting stronger-than-expected results for the end of 2025. Investors focused instead on the company’s profit outlook for the upcoming year, which fell short of analyst projections. Akamai said it plans to increase spending on equipment and infrastructure, reflecting higher costs tied to computer memory shortages and surging demand driven by artificial intelligence.

On the upside, Comfort Systems USA rose 2.4% after reporting quarterly profits that exceeded expectations. Chief Executive Brian Lane described demand for the company’s heating, ventilation, air conditioning and electrical services as “unprecedented,” pointing to continued strength in commercial and industrial construction.

Overseas markets offered a mixed picture. In Europe, major indexes rose modestly, buoyed by the relative calm on Wall Street. In Asia, trading was uneven. The Hang Seng Index fell 1.1% as Hong Kong markets reopened following Lunar New Year holidays. Meanwhile, South Korea’s Kospi surged 2.3% to a record high, led by gains in defense contractors such as Hanwha Aerospace, which have benefited from increased military spending across multiple countries.

For now, the overall tone in financial markets remains measured rather than celebratory. The Supreme Court’s ruling removed one layer of uncertainty but left others intact, particularly around trade policy and the trajectory of inflation. As investors digest a complex mix of legal, economic and geopolitical developments, trading appears likely to remain cautious in the weeks ahead.