Following the landmark decision by the US Supreme Court that struck down most of President Donald Trump’s signature tariffs.
After the 6-3 decision, the S&P 500 rose 0.6% and the Nasdaq rose 1%. Global stock markets, including European stocks, South Korea and India, also rose.
The maximum benefit was for companies with large tariff exposure.
Amazon saw 2% as it sources 70% of its goods from China. Footwear makers Deckers Outdoor, Birkenstock and Crocs rose more than 2%. In addition, there has been a gain of 4% from the furniture retailers Wayfair and Floor & Decor.
Despite the positive growth, uncertainty remains. The court has not directly ruled on whether companies can claim back billions in tariffs already paid.
According to Judge Brett Kavanaugh, the ruling “says nothing about whether and how, if so, the government should go about returning the billions of dollars that it has collected.”
With repayments, there are also concerns about the widening of the federal deficit.
Treasury yields rose on concerns that the repayments could widen the federal deficit. The 10-year yield reached 4.096%, up 2 basis points. The dollar was slightly weaker.
The decision was made at a time when economic data was disappointing.
Fourth-quarter GDP grew at an annual rate of just 1.4%, below expectations and partly due to the government shutdown.
Core inflation remained at 3%, above the Fed’s target of 2%.
