What the Supreme Court's decision to strike down Trump's tariffs means for markets

• US stocks jumped on Friday after the Supreme Court struck down Trump's tariffs.
• Major indexes jumped higher as the decision overshadowed a weak GDP report.
• Commentators, however, acknowledged that Trump has other options to pursue his trade policy.

Stocks rose on Friday after the Supreme Court ruled that Donald Trump's tariffs are illegal.

US stocks reversed earlier losses after the Supreme Court struck down the sweeping trade policy the president unveiled last April. The decision is a major update to an issue that's been a source of intense uncertainty and volatility for much of the last year, and will also raise new questions about how Trump might pursue his landmark policy push.

Here's where major indexes stood around noon ET on Friday:

• S&P 500: 6,906.05, up 0.64%
• Dow Jones Industrial Average: 49,533.13, up 0.28% (+137.97 points)
• Nasdaq Composite: 22,933.537, up 1.10%

The news on tariffs outweighed a disappointing update on economic growth, while PCE inflation, the Fed's preferred inflation measure, heated up faster than expected. GDP grew 1.4% year-over-year last quarter, falling far short of estimates, while PCE rose 0.4% in December, slightly above the anticipated 0.3% gain.

"The market just totally erupted," Jose Torres, a senior economist at Interactive Brokers, told Business Insider. "In the short run, it's good for corporate earnings."

Here are four big takeaways for investors.

1. Trump will likely push for tariffs in other ways

The Supreme Court blocked Trump's ability to impose tariffs through the International Emergency Economic Powers Act, a law that allows the president to regulate economic activity in emergency events.

But there are a handful of other legal avenues the president could use to try to impose tariffs again, according to Michael Brown, a senior research strategist at Pepperstone.

"The Trump administration can impose pretty much the equivalent levies if they so wish to, which you'd imagine they do," he told Business Insider, adding that his outlook on US trade policy hadn't changed significantly over the long term.

"The president has already signalled that he will quickly pivot to other legal tools to achieve similar trade restrictions, and he has at his disposal multiple levers to pull in order to circumvent the verdict," Matthew Ryan, the head of market strategy at Ebury, wrote on Friday, adding that Trump's longer-term strategy for tariffs was "unlikely to be derailed."

"The ball is now in the administration's court—specifically the willingness and ability to impose tariffs under alternative legal authorities," Mohamed El-Erian, a top economist and the chief economic advisor at Allianz, said in a post on X.

2. It's possible new tariffs could be implemented at lower rates

Should Trump impose new tariffs, it's likely that import duties will be lower due to the legal precedent set by the SCOTUS ruling, according to Heather Long, the chief economist at Navy Federal Credit Union.

"In particular, it will be harder for the White House to impose tariffs without clear justification and due process. Businesses and consumers will get more clarity and lower rates going forward," Long wrote in a note on Friday.

3. Tariff refunds are uncertain, but could bring corporate stimulus

The positive market reaction on Friday suggests that investors think tariff refunds are a possibility, according to Pepperstone's Brown.

Joseph Brusuelas, the chief economist at RSM US, said he believed the US would likely issue between $100 billion and $130 billion in tariff refunds.

"When one thinks about the fiscal tailwind that may inject $100-150 billion in cash to American households this year in addition to tariff refunds we are talking real money," he wrote in a post on X, referring to the amount households are expected to get in tax refunds this year.

It's unclear how the refunds, if the US will issue any, will work, Long said.

"The refund process will be a mess," she wrote. "It's likely the White House will fight against issuing refunds at all.

4. Concerns about the deficit are on the rise

Bond yields ticked higher shortly after the Supreme Court ruling on tariffs, a sign that concerns are beginning to swell over the US debt picture again, now that tariff revenue, for the moment, has been taken off the table.

"Tariffs had been functioning as a shadow tax that helped fund spending without explicitly raising taxes. Remove that and the deficit widens, borrowing rises, and historically that is the type of development that leans on the bond market and pressures yields higher," Mark Malek, the CIO of Siebert Financial, wrote in a note on Friday.