WASHINGTON: The US Supreme Court on Friday struck down President Donald Trump sweeping import tariffs, prompting a muted rally in global stock markets while stoking concerns among investors about government finances and rising bond yields.
Read More: US Supreme Court questions Trump’s global tariff powers
The court upheld a lower court ruling that Trump exceeded his authority under a 1977 law used to justify the duties. The decision could require the federal government to repay $150 billion to $200 billion to US and foreign companies that already paid the tariffs, a move likely to benefit sectors such as automakers, consumer goods importers, and other industries sensitive to raw material costs.
⚖️🇺🇸 ‘#Trump tariffs illegal, #POTUS overstepped his authority’: US #SupremeCourt delivers historic verdict 🧾🏛️ https://t.co/OptZXSZGFx pic.twitter.com/la7GWPJjii
— Economic Times (@EconomicTimes) February 21, 2026
The benchmark S&P 500 initially gained about 0.5% before settling around 0.4% mid-afternoon. Retailers, consumer cyclical stocks, and ETFs with exposure to international markets saw the biggest gains. International markets also reacted positively, with the iShares MSCI Mexico ETF up 1.26%, iShares MSCI South Korea ETF up 4.29%, and Canada’s TSX Composite Index up 0.40%.
Bond markets responded with yields on the 10-year Treasury edging higher to 4.09%, reflecting investor concern over potential repayment and increased deficit pressures. Analysts said uncertainty remains over how refunds would be handled, with estimates around $175 billion, and whether additional tariffs may be imposed through other legal authorities.
Market experts warned that while the ruling could boost consumer and exporter confidence, the long-term impact depends on the administration’s next steps. Trump indicated he may explore alternative avenues to reintroduce tariffs, suggesting the broader effect on trade and markets may be limited.
Read More: US court rules Trump’s global tariffs illegal
“The key uncertainty is how the administration responds,” said Gennadiy Goldberg, head of US rates strategy at TD Securities. Observers noted that previous tariff-related volatility had caused significant selloffs in global stocks and Treasuries, highlighting continued investor caution.