What the SCOTUS Tariff Decision Means for Markets
On Friday, the Supreme Court met market expectations and invalidated the tariff imposed
under IEEPA, which effectively nullifies all the tariffs announced by the administration
since Trump took office. On the surface, this decision appears to be a market positive, but
in reality, it is unlikely to be a bullish catalyst, and here’s why. First, this decision was
widely expected (prediction markets had this probability at 80% or higher), and it was
largely priced in already.
Second, the tariff burden has been moving lower ever since “Liberation Day” last April, and
most importantly, the repeated “backing off” of the most intense tariff threats by Trump
(known as TACO) has led investors to believe that Trump will not implement tariff policy
that negatively impacts the economy, and that belief has helped investors to largely
ignore tariff headlines since April.
Third, tariffs are not going away. President Trump has already announced 15% global tariffs
under Section 232. Those tariffs can stay in place for 150 days, but they have to be
renewed continuously, and they will be challenged legally. Additionally, the administration
is launching various investigations that could lead to the reimposition of tariffs, but they
will take time. Point being, the SCOTUS decision doesn’t remove tariffs, and we can expect
continued headlines.
Fourth, the decision does eliminate lingering trade uncertainty. Yes, worst-case scenarios
have been avoided, but businesses will have to contend with shifting trade policies likely
for the remainder of the administration. Bottom line, the decision certainly isn’t a negative
for markets, but it is, if anything, only a slight positive, and it won’t end current market
volatility, which is really rooted in AI anxiety, not tariff concerns.
An Important Week for AI (and Markets) Investors’ focus may be on tariffs, but AI sentiment
is a much bigger influence on markets right now, and that means this week is a potentially
important one for the rally because of AI earnings. Key SaaS (Software as a Service)
companies report this week, including WDAY (Tues) and CRM (Wed). Markets will want to
see solid reports to help stabilize IGV (the software ETF). Additionally, NVDA reports on
Wednesday, and that’s still the most important single stock in the entire market, and
investors need to see a strong report that pushes back on AI anxiety.
Source: Sevens Report 2-23-26