U.S. stocks surged Friday, led by the Nasdaq, following a landmark Supreme Court ruling that struck down President Donald Trump’s global tariffs. This decision provides a significant boost to investor sentiment, which had been previously dampened by weaker-than-expected economic data.
The Supreme Court, with a 6-3 conservative majority, ruled against the tariffs enacted under a federal law intended for national emergencies. These levies, initially set at a baseline of 10% on all imports, with additional duties, had created widespread challenges for businesses and consumers.
Companies directly impacted by the tariffs, including toymakers Hasbro and Mattel, and homebuilders like Pultegroup and Lennar, saw their shares climb following the verdict. Solar companies also experienced gains.
"The perception will be that this should help ease some of the inflationary pressures," stated Michael James, equity sales trader at Rosenblatt Securities. "That's why you're seeing a notable rally not only in the market overall but in consumer-related names specifically."
The ruling could necessitate the refund of over $175 billion in U.S. tariff collections, according to Penn-Wharton Budget Model economists.
At midday, the Dow Jones Industrial Average rose 0.23%, the S&P 500 gained 0.64%, and the Nasdaq Composite advanced 1.10%.
Earlier data indicated a slowdown in U.S. economic growth for the fourth quarter, with inflation picking up in December. Traders largely anticipate the Federal Reserve's next interest-rate cut will occur in June.
In sector performance, communication services led gains, boosted by a significant rise in Alphabet. Technology stocks, however, continued to face pressure amid concerns over high valuations and AI disruption.
Blue Owl Capital shares fell 2.6% after its strategy to return capital and halt redemptions raised investor concerns. Akamai Technologies also slid after forecasting first-quarter adjusted profit below Wall Street estimates.