Stocks Rise After Supreme Court Strikes Down Trump Tariffs

Stocks gained on Friday after the Supreme Court ruled against President Donald Trump’s tariffs, potentially providing relief for companies burdened by higher costs from the duties and easing concern about persistent inflation. The S&P 500 traded up 0.4%, while the Nasdaq Composite rose 0.7%. The Dow Jones Industrial Average rose 45 points, or 0.1%, recovering from a 200-point loss earlier in the session due to disappointing economic data.

Supreme Court Ruling

The Supreme Court struck down most of Trump’s sweeping tariff policy under the International Emergency Economic Powers Act (IEEPA), ruling that the law “does not authorize the President to impose tariffs.” Hindustan Times reported the ruling came down on February 20, 2026. The court did not address whether tariffs already paid would be refunded.

Impact on Key Companies

Shares of Amazon, a company that sources up to 70% of its goods from China, jumped 2% following the ruling. Apparel makers like Deckers Outdoors, as well as retailers such as Home Depot and Five Below, also saw gains. Industrial giant Caterpillar reversed earlier losses, rising almost 1%.

Jed Ellerbroek, portfolio manager at Argent Capital Management, explained the impact on Amazon: “In the case of Amazon specifically, a lot of their stuff is imported from China, so tariffs are going to make the prices on Amazon proceed up for customers and when prices go up, people buy fewer of those things. No longer facing that problem is the source of excitement, I think.”

Market Expectations and Future Outlook

The market’s reaction was relatively muted because the Supreme Court’s decision was largely anticipated. However, economists expect the White House to attempt to reapply many of the same tariffs using alternative legal means. Ellerbroek added, “The next question is, then, ‘What is President Trump going to do about this?’ 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.”

Economic Data and Other Market Factors

Earlier in the day, traders reacted to weaker-than-expected U.S. Economic growth data. Gross domestic product (GDP) increased 1.4% for the fourth quarter, falling short of the 2.5% gain economists had predicted. This followed a strong 4.4% advance in the third quarter. The Commerce Department attributed the slowdown largely to a government shutdown that occurred during the first half of the fourth quarter, estimating it reduced economic growth by around 1 percentage point.

Inflation, as measured by the personal consumption expenditures price index, remained steady in December at 3% excluding food and energy, still above the Federal Reserve’s 2% target.

Alternative asset manager stocks continued to struggle amid concerns about losses in the private credit sector, particularly within the software industry. Shares of Blue Owl Capital, Blackstone, and Ares Management all declined.

Weekly and Year-to-Date Performance

Despite the earlier economic concerns, the Dow is on track for a 0.1% gain for the week. The S&P 500 is poised for a modest weekly increase of 0.7%. The Nasdaq is set to conclude a five-week losing streak, up more than 1%.