Market Has Notable Reaction to Trump Tariff Pivot
The president noted he was "disappointed" by the Supreme Court's IEEPA decision, then quickly announced a new plan.
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Friday’s session started off weakly as it was weighed down by slightly higher-than-expected PCE inflation data and a slightly softer GDP print. The weak open was offset, however, by strong personal spending numbers, which gave investors something to chew on as they tried to assess the macro picture.
Supreme Court Drops Bombshell on Tariffs
Markets were still digesting the economic data when the real headline hit: the U.S. Supreme Court ruled that tariffs imposed under the International Emergency Economic Powers Act (IEEPA) must be removed.
The initial reaction was muted and a bit confused. Some investors view the tariffs as an economic headwind, while others see them as an unfair burden on consumers and businesses. The ruling did not address refunds or other administrative matters, leaving plenty of ambiguity on the table.
Trump Responds Swiftly With New Tariff Framework
President Trump was clearly unhappy with the ruling, describing himself as “deeply disappointed” — but his administration moved quickly.
Within hours, a new tariff plan built on a different legal basis was announced. Trump framed a new 10% global tariff as a net positive, arguing it provides economic certainty. There remains a long list of legal and bureaucratic hurdles ahead, but given the magnitude of the ruling, the market reaction was notably sedate.
Breadth Flat
The biggest winners on the day were members of the Magnificent Seven, which jumped nearly 1.5%.
Small-cap stocks, which are more vulnerable to the confusion surrounding trade policy, finished with a minor loss as a group. Overall market breadth ended up close to flat.
Bonds saw a surge in volatility following the news before quickly recovering from a dip. Precious metals gained renewed traction with the iShares Silver Trust ETF (SIL) jumped 7.5% , and Bitcoin acted a bit better as well.
My Take: Not the Time to Force Trades
I did very little on Friday.
The price action was choppy and random, which is exactly the kind of environment where forcing trades is a mistake. Good setups don’t develop when the tape is lurching around on headline risk. The Magnificent Seven leadership was an encouraging sign, but for now, it looks like an oversold bounce after an ugly breakdown rather than the start of a new trend.
Bottom Line: Market Has Seen This Movie Before
There will be much more tariff news in the weeks ahead, but investors don’t appear too alarmed. Tariffs never turned out to be the disaster that many economic “experts” predicted, and the market has figured out that there’s always another negotiation waiting in the wings when they come into play.
Have a great weekend. I’ll see you Monday.
At the time of publication, DePorre was long SIL.
