The US stock market is poised to open on a cautious note as traders prepare for two significant events that could influence the market’s trajectory in the coming days. In pre-market trading, the three major indices showed little movement, with Dow Jones Industrial Average futures gaining 6 points or 0.01%, the S&P 500 remaining unchanged, and Nasdaq-100 futures up by 0.10%.
Traders are closely watching the US Supreme Court, which is set to announce its decision regarding President Donald Trump’s tariffs later today. This ruling is seen as a potential turning point for the market, especially in light of April’s slump linked to tariff policies. The market is also keenly awaiting the US payrolls report, which is expected to provide insights into the Federal Reserve’s approach to interest rate cuts amid mixed economic data.
In January 2025, soon after being inaugurated for a second term, Trump reopened the tariff debate, targeting an expanded range of trade partners, including India. His administration imposed tariffs ranging from 10% to 50% in April, causing various nations to engage in negotiations with the US, while some have already secured trade agreements.
The legal battles surrounding these tariffs have intensified, with lower federal courts ruling that several of them exceeded the authority granted to the president under existing laws. Specifically, these courts determined that the statute cited by the Trump administration does not give the president the explicit power to levy broad import duties, a jurisdiction that has traditionally rested with Congress.
The Supreme Court’s decision will determine whether Trump can invoke the International Emergency Economic Powers Act (IEEPA) to impose these tariffs without congressional consent. During earlier court arguments, the conservative majority raised critical concerns regarding this interpretation of federal law.
Analysts predict a significant probability of the Supreme Court ruling against Trump, which could obligate the administration to refund $192 billion collected from tariffs in 2025 and an additional $65 billion in 2026. This scenario is anticipated to exert negative pressure on the US dollar and inflation, potentially impacting an already strained economy facing a $38 trillion debt.
Market experts weigh in, with Avinash Gorakshkar, a fundamental equity analyst, expressing caution about the stock market’s trajectory, which is likely to reflect these uncertainties. He noted that should the Supreme Court declare Trump’s tariffs illegal, it could trigger a rally in India, significantly affected by the tariffs, particularly the steep 50% rates.
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, echoed similar sentiments, emphasizing the importance of the verdict’s specifics—whether the tariffs would be partially or completely invalidated—and underlining that the market reaction will hinge on these details.
Meanwhile, analysts such as Anshul Jain from Lakshmishree have observed some positive developments in the market’s technical setup. He noted that the Dow Jones has confirmed a breakout from a 38-day cup-and-handle formation and is supported by critical moving averages, indicating potential upward momentum. He predicts that if this upward trend continues, the index could target the 50,500 mark in the near term.
For the Nasdaq and S&P 500, Jain highlighted the presence of bullish patterns indicating strong demand and robust volume increases, which further support the likelihood of continued upward movement. Specifically, he anticipates that a sustained breakout beyond certain levels could open pathways to higher price targets for these indices.
As the market absorbs the outcomes of the impending Supreme Court decision and the payroll report, traders will remain vigilant, adjusting their strategies in response to these pivotal developments.
