U.S. Supreme Court Shakes Global Markets!

Picture Credit: by Gulf Daily News

A dramatic ruling from the US Supreme Court closed the week with a bang; but markets barely blinked. In a 6–3 decision, the Court determined that President Donald Trump could not use the International Emergency Economic Powers Act (IEEPA) to justify sweeping tariffs imposed during his second term. The verdict removes one of 2025’s most persistent volatility drivers, yet investors responded with notable restraint.

The S&P 500 edged modestly higher into Friday’s close, while the US Dollar slipped only slightly from four-week highs. The muted reaction reflects the nuance of the ruling: while one legal pathway for aggressive tariffs has been blocked, alternative routes remain. Trump has already floated options including a temporary 10–15 percent blanket tariff and potential action under Section 338, which could allow duties as high as 50 percent without congressional approval under claims of discrimination against US commerce.

This lingering ambiguity clouds the outlook for trade policy and capital flows. Rather than delivering relief, the ruling may intensify the slow diversification of international capital away from US assets, a trend that has pressured domestic indices relative to global peers since last year’s “Liberation Day” disruptions.

Picture Credit: by LATimes

Compounding the uncertainty is rising geopolitical risk. Trump’s warning of possible military action against Iran, following stalled nuclear negotiations and reinforced by carrier deployments, adds a more binary threat to markets. Oil traders are particularly alert: West Texas Intermediate futures recently touched six-month highs, while the Brent-WTI spread widened sharply.

Meanwhile, traditional catalysts loom. Consumer confidence surveys from the Conference Board and University of Michigan may offer clearer insight into economic resilience. Corporate focus centers on earnings from Nvidia, the last of the “Magnificent Seven” to report, as enthusiasm around AI investment faces growing scrutiny.

In a landscape where headlines dominate and growth slows, markets appear less shocked than watchful, bracing not for certainty, but for what comes next.