Stocks gained on Friday on news that the Supreme Court ruled against President Donald Trump's tariffs on international trading partners, easing some concerns over the health of the U.S. consumer in response to inflationary pressures.
The Dow Jones Industrial Average (NYSE: DIA) added over 230 points to settle at 49,625.97, while the broader market S&P 500 Index (NYSE: SPY) rose about 0.7% and the tech-heavy Nasdaq Composite (NASDAQ: QQQ) advanced 0.9% to end the session at 6,909.51 and 22,886.07, respectively.
The U.S. Supreme Court on Friday ruled in a 6-3 decision that the law used to justify the majority of Trump's tariff agenda "does not authorize the President to impose tariffs."
The decision added that before Trump, no prior president had ever used the International Emergency Economic Powers Act (IEEPA) "to impose any tariffs, let alone tariffs of this magnitude and scope."
In response, Trump announced he would impose a new 10% global tariff in a post on his social media platform Truth Social, to take effect "almost immediately." Trump also said all the tariffs active under statues Section 232 and Section 301 will remain "in full force and effect."
Jefferies analyst Randal Konik said in a note on Friday that the decision "is a clear positive for consumer discretionary with high import exposure, easing cost pressures and margin drag," pointing to companies such as Nike (NYSE: NKE).
"This [decision] will boost economic growth and provide some relief for American consumers," said Heather Long, chief economic at Navy Federal Credit Union, quoted by CNBC. "Smaller firms will be especially helped by this ruling. They don't have supply chain managers to help source their goods or lobby for exclusions, so tariffs have hit smaller firms especially hard."
Moreover, Wedbush's Dan Ives said in a note on Friday that the Supreme Court's decision should benefit tech stocks.
"With ~$133.5 billion in tariff revenue up for grabs if the US tariff ruling leads to refunds for organizations, we believe this would act as a net positive for tech with financial relief for many companies while creating greater supply chain visibility especially coming from the Asia supply chain," Ives wrote. "This will be a very noisy situation but for the tech space and AI trade its a net positive out of the gates in our view."
Looking ahead, key earnings reports due out next week include Nvidia (NASDAQ: NVDA), Salesforce (NYSE: CRM), Diamondback Energy (NASDAQ: FANG), Domino's Pizza (NYSE: DPZ), Home Depot (NYSE: HD), Keurig Dr. Pepper (NASDAQ: KDP), Warner Bros. Discovery (NASDAQ: WBD), Dell Technologies (NYSE: DELL), and Berkshire Hathaway (NYSE: BRK.A).