Traders work at the opening bell on the floor of the New York Stock Exchange (NYSE) in New York, on February 20, 2026.
Timothy A. Clary | Afp | Getty Images
Stocks gained on Friday after the Supreme Court ruled against President Donald Trump’s tariffs, lifting shares of retailers and other companies that were hit hard last year by rising import and manufacturing costs as a result of the duties.
The Dow Jones Industrial Average rose 93.81 points, or 0.2%, recovering from a 200-point loss earlier in the session on disappointing economic data. The S&P 500 traded up 0.3%, while the Nasdaq Composite rose 0.5%.
The Supreme Court struck down most of Trump’s sweeping tariff policy under the International Emergency Economic Powers Act, with the majority ruling that that law “does not authorize the President to impose tariffs.” The ruling did not address whether tariffs that have already been paid would need to be refunded.
Shares of “Magnificent Seven” member Amazon — a company that sources up to 70% of its goods from China, per Wedbush Securities, and that has already begun to see tariffs impact the price of certain items — jumped 2% following the ruling. Apparel makers such as Deckers Outdoors was also higher, as were retailers like Home Depot and Five Below. Shares of industrial giant Caterpillar reversed earlier losses, rising almost 1%.
“In the case of Amazon specifically, a lot of their stuff is imported from China, so tariffs are going to make the prices on Amazon go up for customers, and when prices go up, people buy fewer of those things,” said Jed Ellerbroek, portfolio manager at Argent Capital Management. “No longer facing that problem is the source of excitement, I think.”
The impact on the overall market was relatively muted because the high court’s rebuke was largely expected by Wall Street. Also, economists expect the White House to reapply many of the same tariffs using other means.
“The next question is, then, ‘What is President Trump going to do about this?'” Ellerbroek added. “He has other options to impose tariffs — I assume he will use those. So, I think that this is an intermediate step in a pretty long story, and I guess the ball is in President Trump’s court now.”
Earlier in the day, traders received a downbeat view on growth of the U.S. economy, as gross domestic product increased 1.4% for the fourth quarter. That was far below the 2.5% gain that economists polled by Dow Jones had anticipated. The 4.4% advance in the third quarter sharply surpassed estimates.
The record-breaking government shutdown is largely to blame, according to the Commerce Department. That stoppage, which took place through the first half of the fourth quarter, took off around 1 percentage point from economic growth, the department estimated.
In addition to the GDP data, the personal consumption expenditures price index report — the Federal Reserve’s preferred inflation gauge — showed that inflation held steady in December. Excluding volatile food and energy prices, core PCE came in at 3%, in line with expectations but still well above the Fed’s 2% target.
Alternative asset manager stocks continued their tough week on Friday, weighing on overall market sentiment, amid growing concern about losses tied to private credit, especially with loans in the troubled software sector. Shares of Blue Owl Capital, which this week gated redemptions from one of its private credit funds, dropped another 1% on Friday. Shares of Blackstone and Ares Management, other big players in private credit, dropped 1% apiece as well.
With Friday’s move, the Dow is heading for a 0.1% gain in the period. The S&P 500 is on pace for modest gains this week, up 0.7%. The tech-heavy Nasdaq is set to snap a five week losing streak — it is up more than 1%.
—CNBC’s Jeff Cox contributed reporting.
