In a decision that sent ripples through global supply chains and domestic trading desks, U.S. equities closed higher this Friday. The primary catalyst was a definitive ruling from the Supreme Court, which struck down the broad global tariffs previously implemented by President Donald Trump.
These duties had been established last year under the auspices of a federal law designed for national emergencies, a move that the High Court found overstepped executive authority.
The U.S. top court, which currently holds a conservative majority, delivered a 6-3 verdict against the administration's emergency trade measures. The justices argued that the federal law intended for national emergencies did not grant the executive branch the latitude to impose permanent, sweeping global tariffs without more specific congressional oversight.
The executive branch's response was swift and defiant. President Donald Trump called the ruling a "disgrace" and immediately pivoted to a different legislative tool to maintain his trade agenda. He announced his intention to impose a 10% global tariff for 150 days under Section 122 of the Trade Act of 1974. This specific provision allows for temporary import surcharges to address balance-of-payment deficits, aiming to replace the emergency duties invalidated by the court.
Despite the promise of new tariffs, investors largely focused on the removal of the more aggressive emergency duties. The collective sigh of relief was palpable across the S&P 500 and the Nasdaq.
Some of the market's most influential entities spearheaded the Friday gains.
Alphabet (Google): Saw a notable 3.7% rise.
Amazon: Climbed 2.6% as logistics concerns eased slightly.
Apple: Rallied 1.5% as investors reconsidered the hardware giant's exposure to import costs.
Nine of the 11 major S&P 500 sectors finished in the green. The communication services sector led the pack with a 2.65% jump, while consumer discretionary followed with a 1.27% gain. The market's overall breadth was healthy, with advancing issues outnumbering decliners by a 2.0-to-one ratio within the S&P 500.
Companies that have spent the last year grappling with increased costs saw significant share price recoveries. Toymaker Hasbro, online retailer Wayfair, Williams-Sonoma (owner of Pottery Barn), and luxury brand RH all saw gains between 0.5% and 2.3%.
The legal victory also opens a massive financial door. Thousands of businesses have previously sought legal recourse against the tariffs. Economists at the Penn-Wharton Budget Model suggest the stakes are astronomical: there is a risk more than $175 billion in U.S. tariff collections will need to be refunded.
While the legal news dominated the headlines, the underlying economic data painted a more complex picture. Early Friday reports indicated that U.S. economic growth slowed more than expected in the fourth quarter. Simultaneously, inflation readings for December showed a surprising uptick.
As the market navigates 2026, the Federal Reserve's next move remains a point of intense speculation. Mike Dickson, head of research and quantitative strategies at Horizon Investments, noted the psychological shift in the market: "Today is a removal of some uncertainty, and we're on to the next phase," Dickson said.
Currently, traders see just over a 50% chance the Fed will cut interest rates by its June policy meeting, according to CME's FedWatch Tool. Investors remained relieved that Trump's newly announced global tariff was not higher, which likely prevented a broader sell-off despite the inflationary data.
While the tariff ruling provided a temporary boost, Wall Street remains hyper-focused on the long-term viability of the Artificial Intelligence boom. The coming week is expected to be volatile as the market prepares for Nvidia’s quarterly results next Wednesday.
Technology stocks linked to AI have experienced significant "gyration" recently. Investors are increasingly demanding evidence that massive capital expenditures in AI are translating into tangible revenue and profit growth. Furthermore, industries from software to logistics are facing existential questions about how rapidly improving AI tools could disrupt their business models.
Not all tech shared in Friday’s joy. Akamai Technologies slumped 14% after the cloud company forecast first-quarter adjusted profit below Wall Street estimates, serving as a reminder that fundamental earnings still drive individual stock performance.
By the end of the session on Friday, the major indices stood as follows:
S&P 500: Climbed 0.69% to end at 6,909.51 points.
Nasdaq: Gained 0.90% to 22,886.07 points.
Dow Jones Industrial Average: Rose 0.47% to 49,625.97 points.
For the week, the S&P 500 rose 1.08%, the Nasdaq gained 1.51%, and the Dow edged up 0.25%. While the S&P 500 is up almost 1% in 2026, it currently trails the broader MSCI global stock gauge, which has gained over 3%.
Wall Street’s Friday performance was a classic "relief rally" triggered by the judiciary’s check on executive trade policy. While the threat of a new 10% tariff under Section 122 remains, the striking down of the emergency measures provides a clearer legal framework for the $175 billion in potential corporate refunds. However, with GDP slowing and the "AI honeymoon" facing a rigorous earnings test from Nvidia next week, the market’s path for the rest of Q1 2026 remains cautiously optimistic yet volatile.