The U.S. stock market ended the day positively despite volatility triggered by a Supreme Court decision on tariffs and weaker-than-expected fourth-quarter GDP data. The ruling limited President Donald Trump's authority to impose tariffs, shifting to a more structured process. Major indices rallied and closed in the green following the announcement.
The Supreme Court issued its ruling on tariffs at 10 a.m., striking down President Trump's use of the International Emergency Economic Powers Act (IEEPA) for broad, rapid tariff impositions. This came amid earlier market declines due to fourth-quarter GDP growth of 1.4%, below the Dow Jones estimate of 2.5%, as reported by the Commerce Department’s Bureau of Economic Analysis.
Following the ruling, the NASDAQ, Dow Jones Industrial Average, and S&P 500 rallied but retreated by midday before climbing again around 12:30 p.m., ultimately closing higher for the day and the week. President Trump, in a midday press conference, stated, “The bottom line is that the word certainty is now in the equation.”
Under IEEPA, the administration could impose duties with little notice, but now tariffs must proceed through Section 232, involving a 90- to 270-day investigation by the Commerce Department before presidential action. This process offers companies advance notice and predictability for imports.
The National Retail Federation welcomed the decision, saying, “The Supreme Court’s announcement regarding tariffs provides much-needed certainty for U.S. businesses and manufacturers, enabling global supply chains to operate without ambiguity.” It added, “Clear and consistent trade policy is essential for economic growth, creating jobs and opportunities for American families.” Retail stocks like Amazon, Home Depot, Walmart, Target, and Five Below rose on the news.
Trump attributed the GDP slowdown to a “Democrat Shutdown” that lasted about half the quarter, from October to November, claiming it cost at least two percentage points. White House spokesperson Kush Desai highlighted robust private sector growth despite the shutdown. However, economist Peter Schiff noted, “Data confirms Trump’s ‘hottest economy’ is cooling fast.” Senate Minority Leader Chuck Schumer called the ruling “a victory for the wallets of every American consumer.” The Court did not address potential refunds for prior levies, leaving that for lower courts.
Many economists argue tariffs curb growth, though the administration emphasizes benefits from tax cuts, deregulation, and energy policies.
