Supreme Court Strikes Down Trump Tariffs, Market Reacts with Caution

The U.S. Supreme Court delivered a significant blow to former President Donald Trump’s trade policy on Friday, February 20, 2026, striking down a substantial portion of his tariff agenda. The 6-3 ruling determined that the International Emergency Economic Powers Act (IEEPA) does not authorize the President to impose tariffs unilaterally . This decision has prompted immediate market reactions and uncertainty regarding the future of U.S. Trade strategy.

The Supreme Court Ruling

The Court’s decision centers on the legality of tariffs imposed by President Trump without congressional approval. The majority opinion, delivered by Chief Justice John Roberts, argued that the President’s interpretation of IEEPA would represent an overreach of executive power, encroaching on Congress’s constitutional authority to regulate trade . Justices Clarence Thomas, Samuel Alito, and Brett Kavanaugh dissented.

This ruling marks the first time the Supreme Court has directly assessed the legal merits of a policy enacted during Trump’s second term. While the court had previously allowed the enforcement of these tariffs during legal challenges, this decision represents a major setback for the former President, who had made tariffs a central component of his economic policy .

Market Response

Domestic markets initially welcomed the Supreme Court’s ruling, though caution remains as investors await clarity on the administration’s revised trade strategy. As of 3:01 PM on February 23, 2026, the Nifty 50 was up 0.52% (131.85 points) at 25,703.75, and the Sensex rose 0.54% (444.32 points) to 83,259.03.

Vinod Nair, Head of Research at Geojit Investments, noted that a weaker U.S. Dollar and declining 10-year Treasury yields may introduce near-term caution in the global market. Sectorally, while the IT index faced pressure due to concerns about AI disruption, domestic themes—including banks, power, FMCG, and consumer discretionary stocks—gained traction based on expectations of resilient demand and economic recovery.

Technically, Nifty 50 has rebounded from the 25,600 support zone, approaching the 25,770-25,800 resistance band. A breakout above 25,800 could lead to further gains toward 26,000 and potentially 26,300, while a fall below 25,500 could trigger a decline to 25,400-25,350, according to Ponmudi R, CEO of Enrich Money.

Trump’s Reaction and Potential Repercussions

Following the ruling, President Trump expressed his disappointment, criticizing the justices in the majority and vowing to pursue alternative trade measures. He announced a 10% global tariff in response to the Supreme Court’s decision , adding further uncertainty to the global trade landscape.

The ruling may also necessitate the U.S. Government to issue refunds potentially totaling $175 billion to companies that paid the invalidated tariffs .

Adani Ports MoU and Other Market Movers

In other market news, shares of Adani Ports and Special Economic Zone (APSEZ) rose approximately 3.5% to an intraday high of ₹1,564.5 on the National Stock Exchange (NSE) after the company signed a strategic memorandum of understanding (MoU) with NMDC and Brazil’s Vale SA on iron ore on February 21, 2026.

BLS International share price also surged 11% in Monday’s session, driven by increased trading volume, reaching ₹297.30 on the NSE.