Wall Street Calms After Supreme Court Strikes Down Trump Tariffs – Stocks Rise

Wall Street Remains Calm After Supreme Court Rejects Trump Tariffs, But President Vows New Measures

Wall Street reacted with relative calm on Friday, February 20, 2026, after the Supreme Court struck down President Donald Trump’s sweeping tariffs, which had previously caused significant disruption in financial markets. The S&P 500 rose 0.7%, while the Dow Jones Industrial Average added 230 points, or 0.5% and the Nasdaq composite climbed 0.9%.

The ruling came after a period of uncertainty, with markets already grappling with reports of slowing U.S. Economic growth and accelerating inflation. Despite the discouraging economic data, the Supreme Court’s decision elicited a muted response, largely because many on Wall Street had anticipated the outcome, according to Brian Jacobsen, chief economic strategist at Annex Wealth Management.

However, the tariffs are not disappearing entirely. President Trump, in an afternoon briefing following the court’s decision, indicated his intention to pursue alternative avenues for imposing taxes on imports. He described the Supreme Court’s ruling as “terrible” and vowed to implement new measures.

“Just so you understand, we have tariffs, we just have them in a different way,” Trump told reporters. He announced plans to sign an executive order imposing a 10% global tariff under Section 122 of federal law, acknowledging that this authority is limited to 150 days. He also stated he is exploring additional tariffs through investigations conducted by the Commerce Department. “During that period of about five months, we are doing the various investigations necessary to put fair tariffs – or tariffs, period – on other countries,” Trump said.

Earlier, Trump suggested that the Supreme Court’s decision had prompted celebrations in other nations, but predicted those celebrations would be short-lived. “Other countries are dancing in the streets, but they won’t be dancing for long,” he stated.

The market reaction was nuanced. Treasury yields edged slightly higher, but not significantly enough to suggest a major shift in investor expectations regarding inflation or government debt. A substantial drop in yields might have indicated expectations of significantly lower inflation, while a jump could have signaled concerns about increased government debt due to lost tariff revenue.

Individual stock performance was mixed. Ralph Lauren experienced a brief surge following the ruling, rising 3.3% before reversing course and ultimately closing with a 2.2% gain. The stock had previously suffered a nearly 23% decline in April of the prior year after Trump’s initial tariff announcements, reflecting concerns about the potential impact on profits.

Globally, gold prices initially dipped after the ruling but quickly recovered, suggesting continued uncertainty among investors. Stock indexes in Europe gained ground, while Asian markets presented a more mixed picture. The Hang Seng fell 1.1%, while South Korea’s Kospi jumped 2.3% to a record high, driven by strong performance from defense contractors benefiting from increased military spending.

Prior to the Supreme Court’s decision, the primary focus for markets had been the aforementioned reports of slowing U.S. Economic growth and rising inflation. These reports elicited a relatively subdued response from investors, who largely maintained their expectations for Federal Reserve policy.

Traders continue to anticipate at least two interest rate cuts by the Federal Reserve this year, although some have slightly adjusted their expectations for the timing of those cuts. Lower interest rates are generally seen as a positive for the economy and investment prices, but also carry the risk of exacerbating inflation. Federal Reserve officials have indicated they want to see further evidence of declining inflation before supporting additional rate cuts.

As of the close of trading, the 10-year Treasury yield remained at 4.08%, while the two-year yield edged up to 3.48%.

Elsewhere in the market, Akamai Technologies experienced a significant drop of 14.1%, one of the largest declines of the day. Despite reporting stronger-than-expected results for the end of 2025, the company’s profit forecast for the upcoming year fell short of estimates. Akamai’s increased investment in equipment and other resources may be an indicator of the impact of computer memory shortages stemming from the artificial intelligence boom.

Comfort Systems, a provider of heating, ventilation, air conditioning, and electrical services, bucked the trend, rising 6.5% after reporting stronger-than-expected profits for the latest quarter. CEO Brian Lane attributed the company’s success to “unprecedented demand.”

The S&P 500 closed at 6,909.51, up 47.62 points. The Dow Jones Industrial Average rose 230.81 points to 49,625.97, and the Nasdaq composite gained 203.34 points to close at 22,886.07.