The S&P 500 ETF (SPY) and the Nasdaq 100 ETF (QQQ) closed Friday on higher ground as investors digested a tariff ruling from the Supreme Court and President Trump’s response to the decision.
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In a 6-3 ruling, the Supreme Court struck down the legality of Trump’s tariffs under the International Emergency Economic Powers Act (IEEPA). SCOTUS didn’t provide guidance on potential tariff refunds, although it warned that the process could turn out to be a “‘mess,’ as was acknowledged at oral
arguments.” The refunds could amount to $175 billion, according to an estimate released by Penn-Wharton Budget Model economists this morning.
Trump criticized the ruling and announced that he would sign an executive order to impose a new 10% global tariff under Section 122 of the Trade Act of 1974. “Today I will sign an Order to impose a 10% GLOBAL TARIFF, under Section 122, over and above our normal TARIFFS already being charged,” he said in a Truth Social post. Section 122 allows the president to impose tariffs of up to 15% for a maximum of 150 days in response to trade deficits or other trade disruptions. The duration can be extended with congressional approval.
Trump also stated that he would begin Section 301 investigations. The statute gives the U.S. Trade Representative authority to investigate unfair trade practices and permits the president to impose tariffs or other penalties based on those findings. Tariffs under Section 301 carry no rate limit and can last up to eight years.
“In order to protect our Country, a President can actually charge more TARIFFS than I was charging in the past under the various other TARIFF authorities, which have also been confirmed, and fully allowed,” Trump said.
Elsewhere, the Bureau of Economic Analysis (BEA) announced that the Personal Consumption Expenditures (PCE) Index rose by 2.9% year-over-year in December, the highest rate since March 2024 and above the estimate of 2.8%. Core PCE, which excludes volatile food and energy prices, increased by 3% from the prior year, the highest since February 2025. Core PCE is the Fed’s preferred gauge of inflation and remains above its target of 2%.
Furthermore, gross domestic product (GDP) growth slowed significantly in the fourth quarter, falling to 1.4% from 4.4% in the third quarter and missing the consensus estimate of 3.0%. Consumer spending and investment contributed to the growth and were partially offset by the effects of the government shutdown and declining exports.
The S&P 500 (SPX) closed with a 0.69% gain, while the Nasdaq 100 (NDX) returned 0.87%.