U.S. stocks rallied on Friday after the Supreme Court ruled that President Trump overstepped his authority in imposing sweeping 2025 “Liberation Day” tariffs under emergency powers, injecting fresh optimism into markets that had been weighed down by trade uncertainty. The S&P 500 climbed roughly 0.7%, the Dow Jones Industrial Average added about 0.2%, and the Nasdaq Composite led gains with a jump of more than 1% as investors welcomed the potential for lower import costs and improved supply chain visibility
The advance marked a sharp reversal from early-session weakness, when stocks initially slipped on softer-than-expected fourth-quarter GDP data and hotter core inflation readings. But as traders digested the 6-3 ruling, risk appetite returned, particularly in tech and transport names seen as beneficiaries of reduced tariff pressure.
Market Movers:
- Opendoor Technologies (OPEN) +19%: Shares surged after fourth-quarter revenue and adjusted EBITDA topped expectations, with management highlighting a 46% quarter-over-quarter increase in homes purchased and improved inventory turnover. While first-quarter revenue guidance came in light and an EBITDA loss is expected, investors focused on the company’s goal of achieving positive adjusted net income on a forward 12-month basis by the end of 2026.
- Etsy (ETSY) +6%: The stock rose after Barclays upgraded shares to Overweight and boosted its price target, citing stabilizing marketplace trends and the pending $1.2 billion sale of Depop to eBay. Although fourth-quarter GMS and revenue slightly missed expectations, EBITDA beat forecasts, and management guided for year-over-year growth in each quarter of 2026.
- GRAIL (GRAL) -47%: Shares plunged after the company’s NHS-Galleri trial failed to meet its primary endpoint of significantly reducing late-stage cancers. While some subgroups showed promising trends and further analysis is planned, investors reacted sharply to the missed headline goal.
- Akamai Technologies (AKAM) -11%: The stock fell despite a fourth-quarter beat as weak earnings guidance overshadowed results. Full-year adjusted EPS projections came in below consensus, raising concerns about margin pressure even as revenue guidance modestly topped estimates.
- Copart (CPRT) -6%: Shares dipped after fiscal second-quarter revenue declined 3.6% year over year and global service volumes fell 8%. Insurance unit weakness and rising expenses pressured margins, offsetting pricing gains and record average selling prices.
Tariff Shockwaves and What Comes Next
The Supreme Court’s decision eliminates the administration’s broad authority to impose tariffs under the International Emergency Economic Powers Act, though duties enacted under Section 232 on metals, semiconductors, and autos remain intact. Analysts estimate refunds to importers could total as much as $175 billion, a development that may support corporate cash flows but also introduce legal and logistical complexities in the months ahead.
Strategists say the ruling is particularly supportive for tech and consumer discretionary companies reliant on Asian supply chains. However, some economists caution that the administration could pursue alternative trade measures, keeping policy uncertainty alive even as markets cheer the immediate relief.
Macro Data Keeps the Fed in Focus
Fourth-quarter GDP expanded at a 1.4% pace, undershooting forecasts, while core personal consumption expenditures rose more than expected on both a monthly and annual basis — reinforcing the Federal Reserve’s cautious stance. With policymakers already signaling patience on rate cuts, investors are recalibrating expectations for the easing cycle. A resilient labor market and improving manufacturing data have underpinned the broader equity outlook, but sticky inflation could delay any pivot to more accommodative policy.
Private Credit and AI Jitters Linger
Beyond tariffs, attention remains on stress points in private credit after Blue Owl halted redemptions in one of its retail-focused funds. Concerns center on exposure to software and AI-related investments that could face valuation pressure if growth expectations falter. Meanwhile, AI infrastructure players remain under scrutiny after reports raised questions about credit conditions tied to data center financing. With Nvidia earnings looming next week, investors are watching closely for signals on the durability of the AI build-out.
Looking Ahead
Markets now face a balancing act between legal clarity on trade and lingering macro headwinds. Investors will monitor whether the tariff ruling translates into sustained sector rotation toward transports, apparel, and tech, or whether renewed policy maneuvering from Washington reintroduces volatility. Upcoming economic releases and corporate earnings — particularly in technology and consumer sectors — will test whether this relief rally has staying power. For now, equities appear buoyed by reduced trade uncertainty, but inflation data and Fed expectations remain the ultimate gatekeepers for the next leg higher.