Wall Street rises on ruling that ‘Trump reciprocal tariffs are unlawful’…uncertainty lifted [Wall Street Briefing]

All three major U.S. stock indexes closed higher in New York trading.

Although the U.S. Supreme Court ruled that President Donald Trump’s reciprocal-tariff policy was unlawful, markets reacted positively. With a decision on a key source of anxiety now in hand, uncertainty eased.

On the 20th (U.S. Eastern Time), the Dow Jones Industrial Average at the New York Stock Exchange (NYSE) ended at 49,625.97, up 230.81 points (0.47%) from the previous session.

The Standard & Poor’s (S&P) 500 rose 47.62 points (0.69%) to 6,909.51, and the Nasdaq Composite added 203.34 points (0.90%) to finish at 22,886.07.

The day brought both the Supreme Court’s tariff ruling and a batch of U.S. economic data releases at once. Figures including fourth-quarter GDP growth, the Personal Consumption Expenditures (PCE) price index, manufacturing and services activity indexes, and the consumer confidence index were published. Among them, the tariff ruling had the biggest impact on sentiment. With the reciprocal-tariff policy deemed unlawful, markets responded with gains. As uncertainty cleared, buyers stepped in.

President Trump also said he would impose an additional 10% tariff on the world under Section 122 of trade law, but the market reaction was muted.

By sector, most groups advanced except health care and energy. Communication services gained more than 2%, while consumer discretionary rose more than 1%.

Mega-cap tech stocks were mixed. Microsoft and Broadcom were slightly lower. Alphabet jumped more than 4%, Amazon rose 2.56%, and Apple, Nvidia and Meta gained more than 1%.

Apple, Nvidia and Amazon—stocks heavily affected by tariffs—reflected expectations of benefits from the ruling.

Jed Ellerbrook, a portfolio manager at Argent Capital, said, “In Amazon’s case, many products are imported from China, so if tariffs are imposed, purchase prices on Amazon go up, and when prices rise, consumers cut back on volumes,” adding, “The expectation that we can now avoid that kind of problem helped drive optimism.”

The Dow, which is weighted toward blue chips, also rose broadly, though staples names such as Walmart and Johnson & Johnson were weaker.

Economic indicators were mixed. U.S. GDP growth in the fourth quarter of last year came in at 1.4%. That reflected reduced government spending due to the federal government shutdown. The Commerce Department said the shutdown lowered growth by about 1 percentage point.

The Fed’s preferred core PCE price index for December rose 0.4% month on month. Headline PCE also increased 0.4%. Both readings beat market expectations and marked the highest levels in about two years.

According to CME’s FedWatch Tool, the probability of rates being kept unchanged through June was priced at 47.9%.

The Cboe Volatility Index (VIX) fell 1.14 points (5.64%) to 19.09.

Shin Hyun-bo, Hankyung.com reporter greaterfool@hankyung.com