United States benchmark averages closed higher on Friday (Saturady AEDT) after the Supreme Court of the United States struck down most of President Donald Trump’s emergency tariff measures, offering potential relief to businesses facing elevated import costs and tempering concerns over persistent inflationary pressures.
The Dow Jones Industrial Average rose 230.8 points or 0.5% to finish at 49,626.0. The S&P 500 gained 47.6 points or 0.7% to close at 6,909.5, while the Nasdaq Composite advanced 203.3 points or 0.9% to 22,886.1.
In a majority opinion, the high court invalidated most of the administration’s sweeping tariff regime introduced under the International Emergency Economic Powers Act, stating that the statute “does not authorise the President to impose tariffs”.
The ruling removes a key legal foundation for the measures, although the White House signalled it would pursue alternative avenues.
In response, Mr Trump said he would impose a fresh 15% “global tariff” under a different authority.
Investor reaction suggested a degree of caution. While the decision was broadly anticipated on Wall Street, uncertainty remains over the fate of tariffs already paid under the previous framework.
The court did not address whether companies would be eligible for refunds, leaving the matter to a lower court. More than US$175 billion (A$248.3 billion) in tariff revenue collected to date is potentially at risk.
Analysts at ANZ said: "The price action following the decision reflected market participants’ uncertainty over how to react. The U.S. administration moved quickly to implement a 15% global tariff under a different authority.
"These Section 122 tariffs are meant for Balance of Payments emergencies and cannot last beyond 150 days without congressional approval.
“The Supreme Court decision did not deal with U.S. firms’ eligibility for refunds of tariff payments, which was passed to a lower court.”
Shares in companies seen as beneficiaries of a softer tariff environment finished higher. Amazon added 2.6%, Home Depot lifted 1% and Five Below gained 1.9%.
Earlier in the session, however, economic data painted a more subdued picture of U.S. growth. Gross domestic product (GDP) expanded at an annualised rate of 1.4% in the fourth quarter, well below the 3% increase forecast by economists.
According to the Commerce Department, the record-breaking government shutdown weighed heavily on activity. The stoppage, which extended through the first half of the fourth quarter, shaved around 1 percentage point off economic growth, the department estimated.
Inflation data released alongside the GDP figures showed price pressures remaining elevated. The personal consumption expenditures price index, the Federal Reserve’s preferred gauge, indicated that inflation held steady in December.
Core PCE, which strips out volatile food and energy components, rose 3% — slightly above expectations of 2.9% and remaining above the central bank’s 2% target.
For the week, the Dow added 0.3%. The S&P 500 climbed 1.1%, while the technology-heavy Nasdaq snapped a five-week losing streak with a 1.5% gain.
In fixed income markets, yields edged higher. The 10-year Treasury yield rose to 4.086%, while the two-year yield increased to 4.482%.
