On Wednesday, the U.S. Supreme Court listened to arguments regarding the legality of the Trump administration's reciprocal tariffs. During the hearing, both liberal and conservative justices expressed skepticism about the legal foundation of these tariffs. As a result of the proceedings, traders on the prediction market Polymarket have reduced the likelihood of the tariffs remaining in place from approximately 50% to just 25%.
Following the Supreme Court hearing, major U.S. stock indexes experienced a rebound from previous losses, signaling a positive market response. However, the potential elimination of these tariffs does not guarantee a straightforward victory for the stock market. According to Wolfe Research, if the Supreme Court mandates that the White House refund billions in collected duties—an action they believe lacks substantial legal backing—it could lead to an increase in U.S. government debt.
This situation may lead to rising Treasury yields, which already saw an uptick on Wednesday, potentially exerting downward pressure on stocks. The market’s volatility could further escalate if Trump chooses to utilize other executive powers to reinstate his tariffs, adding an extra layer of uncertainty for businesses and investors alike.
Mitchell Goldberg, head of ClientFirst Strategy, noted that "uncertainty and unusual" have defined the economic landscape in 2025. He added, “If the Supreme Court rules against the administration, I don't think it's the end of the road for tariff policy; it’s just another bump in the road.” This perspective highlights the ongoing challenges surrounding trade policies and their implications for the market.
In other market news, shares of Chinese robotaxi companies Pony.ai and WeRide faced a challenging debut on the Hong Kong stock exchange, with Pony.ai's stock plummeting over 14% and WeRide opening approximately 12% lower.
Conversely, Snap Inc. exceeded revenue expectations and raised its guidance. The company announced a significant $500 million stock buyback and partnered with Perplexity AI, leading to a 15.5% increase in Snap’s shares during extended trading hours on Wednesday.
The overall U.S. stock market showed resilience on Wednesday, particularly within the technology sector. Companies like AMD, Broadcom, and Micron Technology saw their stocks rise, contributing to the market's recovery from Tuesday's declines.
In the cryptocurrency realm, Bitcoin "whales"—referring to wallets that hold substantial amounts of bitcoin—may be liquidating their holdings. This trend contrasts with smaller investors, who have reportedly increased their bitcoin positions, according to a Citigroup analyst. Such dynamics could significantly influence bitcoin's price in the coming days.
As these developments unfold, investors and analysts will be closely monitoring both the Supreme Court's decisions and market trends to navigate this intricate landscape.
