Following the US Supreme Court’s landmark decision to remove most of President Donald Trump’s signature tariffs.
After a 6-3 ruling, the S&P 500 rose 0.6% and the Nasdaq gained 1%. Global stock markets, including European stocks, South Korea and India, also rose.
The maximum benefit was for companies with heavy tariff exposure.
Amazon scored 2% as it sources 70% of its products from China. Footwear makers Deckers Outdoor, Birkenstock and Crocs rose more than 2%. Additionally, furniture retailers Wayfair and Floor & Decor have gained 4%.
Despite positive growth, uncertainty persists. The court has not directly addressed whether companies can claim billions in fees already paid.
According to Justice Brett Kavanaugh, the ruling “says nothing about whether and how the government should return the billions of dollars it has collected.”
In the case of refunds, there are also concerns about the widening federal deficit.
Treasury yields rose amid concerns that the refunds could widen the federal deficit. The 10-year yield hit 4.096%, up 2 basis points. The dollar weakened slightly.
The decision was made at a time when economic data was disappointing.
GDP in the fourth quarter expanded at an annual rate of just 1.4%, below expectations and partly due to the government shutdown.
Core inflation remained at 3%, above the Federal Reserve’s 2% target.
