The US Supreme Court ruled that Donald Trump exceeded his authority in imposing sweeping tariffs under the International Emergency Economic Powers Act (IEEPA). The decision sparked a rally on stock markets, with the Dow Jones rising 138 points to 49,533, the S&P 500 up 0.32%, and London's FTSE 100 climbing 75 points to 10,700, near its record high.
According to Michael Brown of Pepperstone, the IEEPA tariffs account for roughly half of the overall average tariff rate increase since President Trump returned to office. However, he noted that alternative trade law sections, such as Section 232 and 301, could be used to re-impose similar measures, potentially keeping the average tariff rate around 16%. Clarity on refunds for companies that paid the tariffs remains pending.
In the UK, the government reported a record-breaking budget surplus of £30.4bn, while retail sales in Great Britain saw their biggest monthly rise since April 2024, driven by art and antiques. The FTSE 100 closed 59 points higher at 10,686, after hitting a new intraday high of 10,745.
European carmakers also gained, with the sector rising 1.1%. Stellantis climbed 2.3%, BMW added 0.8%, and Diageo, hurt by tariffs on whisky and tequila, jumped 3.9% as the top FTSE 100 riser. US bond yields edged up as traders assessed the possibility of tariff refunds.
