Supreme Court Ruling on Tariffs Boosts US Stocks and Yields
The U.S. Supreme Court struck down tariffs from the Trump administration, leading to a rally in U.S. stocks and a rise in Treasury yields. Major indices including the S&P 500, Nasdaq, and Dow Jones all posted strong gains. The decision contributes to a risk-on sentiment in global markets, which can provide a supportive backdrop for speculative assets like cryptocurrencies.
- The Supreme Court's 6-3 decision in *Learning Resources, Inc. v. Trump* ruled that the President does not have the authority to impose broad tariffs under the International Emergency Economic Powers Act (IEEPA) of 1977, as that power belongs to Congress. This specifically nullifies the sweeping "Liberation Day" reciprocal tariffs levied against most trading partners. - The ruling voids tariffs that had already collected over $160 billion from importers and were projected to raise another $1.4 trillion over the next decade. Some estimates place the total collected amount at risk of being refunded as high as $200 billion, though the court did not specify a refund process. - In an immediate response, former President Trump announced he would use a different authority, Section 122 of the Trade Act of 1974, to impose a new 10% global tariff. This authority, however, limits the tariffs to 150 days unless extended by Congress. - The market rally saw the Dow Jones Industrial Average climb by 230 points (0.5%), the S&P 500 by 0.7%, and the Nasdaq Composite by 0.9%. The consumer discretionary and communication services sectors were the top performers in the S&P 500. - The semiconductor industry is expected to see minimal direct impact, as most chips were already exempt from the IEEPA tariffs. The greater risk to tech hardware comes from tariffs on finished goods—like consumer electronics—which could indirectly affect chip demand. - Bitcoin experienced a brief, headline-driven spike of about 2% to just over $68,000 within minutes of the ruling before retracing, indicating a muted overall reaction from crypto markets. Analysts suggest the event's long-term impact on crypto will depend more on its secondary effects on the U.S. dollar and overall risk appetite rather than on direct trade flows.
