The Supreme Court ruled 6-3 that IEEPA tariffs are unconstitutional, sparking a broad relief rally. S&P 500 +0.72%, Nasdaq +0.88%. Silver exploded +7.9%. Gold hit new ATH near $5,080. Iran strike risk lingers. Trump announced a replacement 10% global tariff under Section 122. NVIDIA earnings Wednesday.
All three major indices posted weekly gains thanks to Friday's SCOTUS-fueled rally, snapping the Nasdaq's five-week losing streak. The week was dominated by three themes: Iran escalation (oil +7% mid-week), SCOTUS tariff ruling (Friday relief rally), and sticky inflation (Core PCE at 3%).
| Index / Asset | Friday Close | Friday Change | Weekly Change | Highlight |
|---|---|---|---|---|
| S&P 500 (SPY) | $689.43 | +0.72% | +0.7% | SCOTUS rally, weekly gains |
| Nasdaq (QQQ) | $608.81 | +0.88% | +0.6% | Snapped 5-week losing streak |
| Dow Jones (DIA) | $496.08 | +0.47% | +0.2% | WMT guidance weighed |
| Russell 2000 (IWM) | $264.61 | Flat | +0.6% | Small caps lagging |
| Gold (GLD) | $468.62 | +1.97% | +1.3% | New ATH |
| Silver (SLV) | $76.62 | +7.9% | +7.9% | Explosive move |
| Bonds (TLT) | $89.41 | -0.23% | -0.5% | Yields rising, PCE sticky |
| Oil (USO) | $80.85 | -0.42% | +3.2% | Iran premium, then profit-taking |
A tale of two halves: Mon-Thu saw markets wobble on WMT guidance miss, Iran escalation, and hot inflation prints. Friday's SCOTUS ruling flipped the script, triggering a broad relief rally. The question now: will the replacement 10% tariff under Section 122 dampen the enthusiasm? And will NVIDIA earnings Wednesday justify AI valuations?
NVIDIA (NVDA) — Wednesday Feb 25 after close. Consensus: $65.6B revenue (+67% YoY), EPS $1.52. Goldman Sachs targets $67B+. This is the definitive test for AI capex spending — every Magnificent 7 company has committed $60B+ annual AI capex. A miss would ripple through the entire semiconductor supply chain (TSMC, SK Hynix, ASML). A beat could push the Nasdaq to new highs.
| Index | Close | Change | Volume | Comment |
|---|---|---|---|---|
| S&P 500 (SPY) | $689.43 | +0.72% | 99.3M | SCOTUS rally, near 52W high |
| Nasdaq 100 (QQQ) | $608.81 | +0.88% | 73.5M | Tech led, AMZN +2% |
| Dow Jones (DIA) | $496.08 | +0.47% | 6.1M | Steady gains, industrials |
| Russell 2000 (IWM) | $264.61 | Flat | 45.8M | Small caps lagged the rally |
US equities rallied sharply on Friday after the Supreme Court struck down Trump's IEEPA tariffs in a 6-3 decision, removing what had been the most disruptive trade policy in decades. Chief Justice Roberts wrote the majority opinion, ruling that the 1977 IEEPA law does not authorize tariff imposition. The average tariff rate drops from ~17% to ~7% — the biggest trade policy shift since "Liberation Day."
Amazon and Home Depot jumped ~2% as retail and import-heavy sectors immediately priced in lower costs. Tech led the rally with QQQ +0.88%, snapping a five-week losing streak. However, the rally was tempered by two headwinds: (1) Q4 GDP came in at just 1.4%, well below estimates, and (2) Core PCE held steady at 3%, keeping the Fed on a "higher for longer" stance.
In response to the ruling, Trump announced a replacement 10% global tariff under Section 122 of the 1974 Trade Act. Markets viewed this as less severe than the IEEPA tariffs (~17% average), hence the net positive reaction. The key question: will Section 122 survive legal challenges?
Import-heavy retailer benefits directly from tariff removal. Analysts estimate $2-3B annual savings.
Home Depot surged on tariff relief + upcoming earnings Tuesday. Imports from China a major cost factor.
EEM surged to 52W high at $62.36. Trade-sensitive EM equities rallied hardest on tariff news.
The International Emergency Economic Powers Act (1977) allows the president to regulate imports during a national emergency. Before Trump, no president had used it for tariffs. The Supreme Court ruled that "regulate importation" doesn't equal "impose tariffs." This limits executive trade authority and shifts power back to Congress. The $130B already collected may be refundable, though legal battles over refunds could take years.
| Index | Close | Change | Context |
|---|---|---|---|
| STOXX 600 | — | +0.80% | Pan-European rally on SCOTUS |
| DAX (Germany) | 25,260.69 | +0.87% | Export-heavy Germany benefits most |
| CAC 40 (France) | 8,515.49 | +1.39% | Luxury + industrials lead |
| FTSE 100 (UK) | 10,686.89 | +0.56% | Miners + energy positive |
| EFA (MSCI EAFE) | $104.90 | +0.82% | 52W high: $105.24 |
| EEM (Emerging) | $62.34 | +2.13% | New 52W High |
European stocks rallied strongly on Friday, led by the CAC 40 (+1.39%) as the SCOTUS tariff ruling lifted trade-sensitive exporters across the continent. Germany's DAX surged +0.87% to 25,260 — auto manufacturers (BMW, Mercedes, VW) and industrial exporters were among the biggest beneficiaries of reduced US tariffs.
Moncler soared +15%, the top STOXX 600 performer, after beating full-year revenue estimates. Earnings season continued with Air Liquide, Danone, Sika, Anglo American, and Kingspan Group reporting. The European earnings beat rate remains above 60%.
Key macro data: Eurozone Flash PMI came in at 50.2 (composite), right at the expansion/contraction threshold. Germany's manufacturing PMI remains in contraction at 47.3, though services at 52.1 provided offset. UK retail sales rose +1.8% in January, beating expectations.
Despite the SCOTUS rally, European markets remain vulnerable to oil price shocks from Iran tensions. If the Strait of Hormuz is disrupted (20% of global oil supply), European industrials would be first hit due to energy import dependence. Conversely, Shell, TotalEnergies, and BP directly benefit from elevated crude prices.
| Index / ETF | Close | Change | Context |
|---|---|---|---|
| Nikkei 225 | 56,825.70 | -1.12% | Consumer cyclicals drag |
| TOPIX | 3,808.48 | -1.13% | Broad-based weakness |
| Hang Seng | 26,443.69 | -0.98% | Tech stocks dragged |
| FXI (China) | $38.81 | +0.52% | US-listed China ETF diverged |
Asian markets traded before the SCOTUS ruling and thus missed the US/European rally. Japan's Nikkei fell -1.12%, pressured by consumer cyclical stocks and geopolitical uncertainty. The Hang Seng dropped -0.98%, dragged lower by tech names amid US-Iran tensions.
PM Sanae Takaichi delivered her first policy speech, warning against China's "coercion" in the East and South China Seas, and pledged to break with "excessive fiscal austerity" — increasing investments in AI, chips, and shipbuilding. This is structurally positive for Japanese defense and tech stocks.
The US-listed FXI ETF rose +0.52% on Friday as US investors bid up China exposure on the tariff ruling. This divergence from the local Hang Seng suggests Monday could see a catch-up rally in Asian markets as they react to the SCOTUS decision.
NVIDIA's earnings (Feb 25) will have a direct impact on Asian tech: TSMC (primary foundry), Samsung (HBM memory), SK Hynix, and the broader semiconductor supply chain. Consensus: $65.6B revenue. Goldman Sachs forecasts $67B+. Any result below $65B would be negative for the sector. Asian semis will gap on Thursday morning.
Bitcoin consolidates around $67,800, essentially flat this weekend after bouncing from $66,400 mid-week lows. The SCOTUS tariff ruling had limited direct impact on crypto — BTC trades more on macro liquidity expectations and Iran risk premium than trade policy.
Key dynamics: BTC remains -46% from its ATH ($126,198) and well below the 50-day MA ($83,859). Ethereum stays sub-$2,000 at $1,962, -60% from ATH. The weekly performance was flat to slightly negative: BTC went from ~$68,843 Monday to ~$67,829 today.
| Asset | Support | Resistance | Trend |
|---|---|---|---|
| BTC | $65,600 | $70,000 | Range $65.6K-$70K |
| ETH | $1,900 | $2,040 | Below $2K, weak |
| SOL | $79.75 | $88 | Bounce attempt |
| XRP | $1.38 | $1.50 | Under pressure |
| DOGE | $0.092 | $0.105 | Weak, -67% from ATH |
The SCOTUS ruling is indirectly bullish for crypto: lower tariffs reduce inflationary pressure, which makes Fed rate cuts more likely. Rate cuts = more liquidity = risk-on assets benefit. However, the replacement 10% tariff under Section 122 and sticky Core PCE (3%) keep the Fed cautious. Watch for any Iran escalation this weekend — military action would drive a flight to BTC as a "digital gold" hedge.
Gold (spot ~$5,080) pushed to new all-time highs on Friday, driven by a potent combination of geopolitical hedging (Iran), dollar weakness (SCOTUS tariff removal weakens USD), and central bank buying. GLD closed at $468.62, up +1.97%. Year-to-date, gold is up ~25% — the best start to a year since 2016.
Silver (SLV) delivered its biggest single-day gain in months, surging +7.9% to $76.62. The move was driven by: (1) gold breakout pulling silver higher (gold/silver ratio compression), (2) industrial demand expectations from potential tariff reduction, and (3) short-covering as SLV broke above its 50-day MA. Silver remains -30% from its 52W high ($109.83), suggesting significant catch-up potential if gold holds.
The Gold/Silver ratio (gold price / silver price) currently sits around 66:1. Historically, the long-term average is ~60:1. When the ratio is high (>70:1), silver is considered undervalued relative to gold. Friday's massive silver move compressed the ratio, but at 66:1 it still suggests silver has room to outperform if the precious metals rally continues.
USS Gerald Ford and USS Abraham Lincoln carrier strike groups deployed. Iran conducting "Smart Control" exercises in Strait of Hormuz. Trump's "10-day decision" window approaches. Eurasia Group puts strike probability at 65% by April.
Market impact: Oil $100+ if Hormuz disrupted. Gold $5,500+. Indices -5% to -10%. Defense stocks rally.
IEEPA tariffs struck down 6-3. Average tariff drops from ~17% to ~7%. Companies may seek $130B+ in refunds. Trump's replacement 10% tariff under Section 122 faces its own legal challenges.
Market impact: Net positive — lower costs for importers, reduced inflation pressure. Refund timeline uncertain.
Geneva talks continue. Energy ceasefire remains the primary objective. Direct impact on European natural gas prices and EUR/USD. No immediate escalation expected this weekend.
Why do markets react to court decisions?
Courts can invalidate laws, regulations, and executive actions that directly affect corporate earnings, taxes, and trade costs. Friday's SCOTUS ruling is a textbook example: by striking down tariffs, the court instantly reduced import costs for thousands of companies, directly boosting their profit margins.
The Tariff Impact Chain:
Who benefits most from tariff removal?
Key takeaway: When a major policy is overturned, don't just trade the headline. Ask: (1) What is the actual dollar impact? (2) Who benefits most? (3) Can the government work around the ruling? Trump's immediate announcement of a Section 122 replacement tariff shows that legal victories don't always mean permanent change.
Historical parallels: The 2012 ACA ruling (Obamacare upheld = healthcare stocks rallied), the 2024 Chevron deference overturn (energy/industry stocks rallied on reduced regulation), and now the 2026 IEEPA ruling. Court rulings can move sectors by 2-5% in a single session.
These ideas are for educational purposes only. They do not constitute investment advice. All trading involves risk of loss. Adjust position sizing to your risk profile. High-volatility environment: reduce position sizes.
Disclaimer: This briefing is for informational and educational purposes only. It does not constitute investment advice, a recommendation, or an offer to buy or sell any securities. All investments involve risk, including the possible loss of principal. Past performance does not guarantee future results. Always conduct your own research and consult a licensed financial advisor before making investment decisions. Data sourced from Yahoo Finance, CNBC, MarketWatch MCP Gateway, and other public sources. Prices and data are as of market close February 20, 2026.
© 2026 Market Watch. All rights reserved.
Published Saturday, February 21, 2026 at 07:00 ET