Stock markets jump after US supreme court strikes down Trump tariffs
After the landmark decision of the U.S. Supreme Court striking down most of President Donald Trump’s signature tariffs.
After 6-3 ruling, S&P 500 rose 0.6% and the Nasdaq gained 1%. Global stock markets, including European shares, South Korea, and India, also climbed.
The maximum benefit was for companies with heavy tariff exposure.
Amazon saw 2% as it sources 70% of its goods from China. Footwear makers Deckers Outdoor, Birkenstock and Crocs rose more than 2%. Moreover, there has been a 4% gain from furniture retailers Wayfair and Floor & Decor.
Despite the positive growth, the uncertainty remains. The court has not directly addressed whether companies can reclaim billions in already-paid tariffs.
As per Justice Brett Kavanaugh, the ruling “says nothing about whether, and how, if so, the Government should go about returning the billions of dollars that it has collected.”
With refunds, there are also concerns about the widening of the federal deficit.
Treasury yields rose amid concerns that the refunds could widen the federal deficit. The 10-year yield reached 4.096%, up 2 basis points. The dollar was slightly weaker.
The decision was made at a time when economic data was disappointing.
The GDP in the fourth quarter expanded at an annual rate of only 1.4%, below expectations and partly due to the government shutdown.
Core inflation remained at 3%, above the Fed’s 2% target.
