The S&P 500 Index ($SPX) (SPY) on Friday closed up +0.69%, the Dow Jones Industrial Average ($DOWI) (DIA) closed up +0.47%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +0.87%. March E-mini S&P futures (ESH26) rose +0.69%, and March E-mini Nasdaq futures (NQH26) rose +0.86%.
Stock indexes recovered from early losses on Friday and rallied, with the S&P 500 and Nasdaq 100 posting 1-week highs after the Supreme Court struck down President Trump’s global tariffs. The Supreme Court said Mr. Trump exceeded his authority by invoking a federal emergency powers law to impose his “reciprocal” tariffs as well as targeted import taxes on countries to address fentanyl trafficking.
After the Supreme Court’s ruling, President Trump said he would impose a 10% global tariff under Section 122 of the Trade Act of 1974, over and above tariffs already being charged. He declared all national security tariffs under Section 232 and existing Section 301 tariffs to be in full force and effect. Section 122 tariffs last only 150 days, and Congress would need to approve any extension. Section 301 tariffs require country-specific investigations that include hearings and an opportunity for input from companies or nations affected.
Stocks initially moved lower on Friday after the US Q4 GDP grew at a weaker-than-expected pace. Also, signs of stubborn inflation pressures may keep the Fed from cutting interest rates after the Dec core PCE price index, the Fed’s preferred inflation gauge, rose more than expected. In addition, US manufacturing activity slipped after the Feb S&P manufacturing PMI unexpectedly declined.
Geopolitical risks are bearish for stocks. President Trump on Thursday ramped up pressure on Iran to strike a deal over its nuclear program, saying he thought 10 to 15 days was “pretty much” the “maximum” he would allow for negotiations to continue, and “We’re either going to get a deal, or it’s going to be unfortunate for them.”
US Q4 GDP rose +1.4% (q/q annualized), weaker than expectations of +2.8%. The Q4 core…
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