Jim Edwards
Mon, February 23, 2026 at 3:13 AM PST
The dollar declined against foreign currencies. Stocks in Asia and Europe broadly sold off, and S&P 500 futures were down 0.22% before the open in New York as investors began to realize that the fallout from the U.S. Supreme Court’s tariff decision, and President Donald Trump’s reaction to it, is going to be more complex than traders initially thought.
At first glance, ending the tariffs looked broadly good for stocks because it makes international trade easier and cheaper for companies. Unsurprisingly, the S&P 500 closed up 0.69% on Friday.
Goldman Sachs also reported that its in-house “Risk Appetite Indicator” had sunk back from its recent peak.
In that context, investors fled—again—to the safe haven of gold, which rose 1.81% this morning and looked to be making an attempt at a new record high.But after Trump said he would propose new tariffs of 10%, and then changed his mind and made it 15%, analysts began to realize that some of the things Trump might do next could be more extreme than his “Liberation Day” tariffs and will certainly be more complex.
As UBS’s Paul Donovan put it, “Welcome back uncertainty.”
BNP analyst William Bratton published a research note summarizing Trump’s options. “Some of these could be highly punitive,” he said:
Section 122 of the 1974 Trade Act is valid only for the next 150 days and must then be extended by Congress. It is not applicable to agricultural products, metals, minerals, chemicals, oil, gas, pharmaceuticals, aircraft, some electronics, and various automobiles.
Section 301 tariffs “have no upper limit, have proved to be highly sticky once implemented (as with those imposed on China in 2018), and could, in theory, be applied to any country that does not agree to a trade agreement with the U.S. that embeds higher tariffs,” Bratton wrote.
Section 232 tariffs also “have no upper limit and can be expanded in scope once implemented. Trump has already used this law to expand and raise the tariffs on multiple products—most notably on cars and car parts—and various Section 232 investigations are currently ongoing including into semiconductors and pharmaceuticals.”
Bratton argued that Asian companies will react by increasingly detaching themselves from U.S. trade. “We expect U.S. trade policy…to become increasingly complex and more targeted resulting in a patchwork of tariff measures and trade agreements…the global economy will continue to fragment with U.S. trade flows steadily becoming less important as Asian trade becomes increasingly more regional in nature,” he told clients.
The high court ruling—and Trump’s reaction to it—triggered dozens of countries to review whether they now have trade agreements with the U.S. or not.
“The European Parliament’s trade committee was due to approve the EU-U.S. deal on Tuesday but the committee’s chair, Bernd Lange, signaled that would likely be postponed as it seeks clarity on U.S. trade policy. India has also said that it will postpone talks with the U.S. scheduled for this week aimed at finalizing their interim U.S. trade deal,” according to Peter Schaffrik and his team at RBC.
Here’s a snapshot of the markets this morning:
S&P 500 futures were down 0.22% this morning. The index closed up 0.69% in its last session.
STOXX Europe 600 was down 0.28% in early trading.
The U.K.’s FTSE 100 was flat in early trading.
Japan’s markets are closed today.
China’s markets are closed today.
The South Korea KOSPI was up 0.65%.
India’s NIFTY 50 was up 0.52%.
Bitcoin declined to $66.4K.
This story was originally featured on Fortune.com
S&P 500 Futures Slide 0.6% After Court Voids Trump Tariffs
In this article: This article first appeared on GuruFocus.
Stocks and the dollar moved lower as investors recalibrated expectations around US trade policy following a Supreme Court ruling that struck down President Donald Trump's emergency levies. Futures tied to the S&P 500 (SPY) fell 0.6% as markets assessed the potential implications of a newly announced 15% global tariff, a shift that may not immediately resolve uncertainty. Currency traders rotated into traditional havens including the Swiss franc and the yen, gold advanced toward its highest level this month, and Bitcoin briefly slipped below $65,000, reflecting a more cautious tone across risk assets.
The ruling lands at a delicate juncture. Markets were already contending with concerns surrounding artificial intelligence disruption and rising US-Iran tensions, and the renewed focus on trade policy could add another layer of volatility. Nasdaq 100 (NASDAQ:QQQ) contracts declined 0.7%, while European equities dropped 0.3%, led by weakness in the technology sector. Treasuries were little changed. Investors are now turning their attention to President Trump's State of the Union address on Tuesday for signals on trade and broader policy priorities ahead of this year's mid-term elections, as well as to Nvidia Corp.'s earnings on Wednesday, which could further influence sentiment around AI-linked equities.
In Asia, technology shares advanced amid expectations that the court's decision might be particularly supportive for China and India, two economies that had been heavily affected by earlier US tariff measures. Still, strategists suggested the ruling could increase near-term uncertainty rather than provide clarity. Some market observers warned that the re-emergence of global trade risk may weigh on US assets, with the dollar's decline potentially extending and the S&P 500's relative underperformance becoming more pronounced as investors incorporate the evolving tariff framework into their outlook.
No comments:
Post a Comment