Futures tied to the major U.S. equity indexes moved lower on Monday as markets tried to parse two linked developments: a Supreme Court decision that undercut the administration’s emergency tariff powers and President Donald Trump’s quick pivot to apply a temporary across-the-board surcharge. The legal setback and the policy response together are reshaping investor expectations about trade policy, company balance sheets and the international backdrop for commerce.
Equity futures drift downward
By 03:08 ET (08:08 GMT) on Monday, futures contracts signaled a pullback from the gains posted at the end of the previous week. The Dow futures contract had dropped by 224 points, or 0.5%, S&P 500 futures were down by 40 points, or 0.6%, and Nasdaq 100 futures were lower by 185 points, or 0.7%. The pullback followed a week in which the main averages on Wall Street finished higher as investors reacted to the Supreme Court’s closely watched decision.
The high court found that the president had overstepped the boundaries of a 1977 emergency powers statute when enacting broad import duties on multiple countries. The decision has left open a series of questions for businesses and markets, including whether importers who paid duties will be eligible for refunds.
Analysts at ING highlighted the ruling’s broader signal about limits on executive authority.
"Friday’s Supreme Court ruling sent a strong signal about the limits of presidential power,"the ING note said, while cautioning that the president appears unlikely to take the court’s decision as a reason to step back from an aggressive tariff agenda.
"Uncertainty is back,"the analysts added.
President moves to 15% global tariff after court rebuke
In response to the court’s action, Mr. Trump labeled the ruling a "disgrace" and moved to invoke authority under a section of the 1974 Trade Act to impose across-the-board tariffs at a rate of 15% on global imports for up to 150 days to address what the administration framed as "international payment problems." A White House communication had initially indicated tariffs would be set at 10% as of Tuesday, but the president raised that figure over the weekend.
The statute chosen by the administration - the Section 122 duties of the Trade Act of 1974 - includes a 150-day limit. Congress, which the Supreme Court’s ruling emphasized in its analysis of constitutionally-mandated trade powers, could extend that 150-day period for another 150 days after it expires. ING analysts noted another possible route: the president could allow the surcharge to expire, declare a new emergency and restart the 150-day clock, a practice the analysts described as opening the door to what they called a "de facto perpetual tariff instrument."
U.S. Customs and Border Protection has said it will stop collecting the tariffs that were struck down by the Supreme Court at 12:01 a.m. EST (05:01 GMT) on Tuesday. The agency did not explain why levies continued to be collected at ports of entry for days after the ruling nor did it indicate whether importers could expect refunds for duties already paid.
Trading partners press for clarity
Major U.S. trading partners have moved quickly to decipher how the court’s ruling and subsequent U.S. policy shifts will affect agreements that were negotiated in recent months with the previous administration. The European Commission, acting as the bloc’s chief negotiator, asked Washington to adhere to the terms of an accord reached in 2025 and demanded "full clarity" on changes to U.S. tariff policy following the high court decision.
In its statement the Commission said the current circumstances are "not conducive to delivering 'fair, balanced, and mutually beneficial' transatlantic trade and investment." The statement concluded in blunt terms: "A deal is a deal."
China, which recently engaged in intensive negotiations with the United States during the prior tariff disputes, said it was carrying out a "full assessment" of the ruling and urged the U.S. to refrain from "unilateral tariff measures" against trading partners. China’s Commerce Ministry emphasized the mutual benefits of cooperation, saying "Cooperation between China and the United States is beneficial to both sides, but fighting is harmful."
Fed-watch: Waller to deliver economic outlook
Investors are also watching for remarks from Federal Reserve Governor Christopher Waller, who is scheduled to speak in Washington on the economic outlook. Waller was one of two governors who dissented from the Federal Open Market Committee’s decision in January to hold the federal funds rate in a range of 3.5% to 3.75%.
The Fed noted a stabilizing labor market and steady inflation as reasons for keeping rates unchanged in January. Waller and fellow Governor Stephen Miran, however, supported lower borrowing costs at that meeting, citing concerns that the jobs picture may be vulnerable. The central bank, after cutting rates multiple times in 2025, is still broadly expected to resume reductions later this year, though the timing remains uncertain. Minutes from the Fed’s January gathering included language suggesting that rate increases could be considered if inflation remained stubbornly above the 2% target.
Market participants will be attuned to any comments Waller makes on inflation and employment, as well as any discussion he may offer regarding how the tariff dispute and the Supreme Court ruling factor into the outlook for prices and jobs.
Oil eases after a strong week
Energy markets gave back part of last week’s gains on Monday. Brent futures fell 1.3% to $70.39 a barrel, while U.S. West Texas Intermediate crude slipped 1.4% to $65.55 a barrel. Both benchmarks had jumped nearly 6% the prior week amid worries about a potential U.S.-Iran conflict and an unexpected decline in U.S. crude inventories.
A diplomatic development is now in focus: a third round of U.S.-Iran nuclear talks scheduled for Thursday in Geneva. That event has raised hopes of a negotiated outcome that could reduce the risk of supply interruptions from the Middle East. Iran remains a significant producer within OPEC and is recognized as holding some of the world’s largest proven crude reserves, which is part of why diplomatic progress or the lack of it can exert meaningful influence on oil prices.
Market implications and near-term focal points
The Supreme Court decision, the administration’s quick invocation of another trade statute and the unanswered questions about refunds and long-run tariff mechanics have returned uncertainty to the trade-policy front. That uncertainty is likely to reverberate through sectors sensitive to import costs and cross-border commerce, including manufacturing, retail and logistics, as companies and trading partners look for clarity on costs and contractual commitments.
At the same time, the central bank backdrop remains important. Investors will weigh commentary from Waller and other policymakers against incoming data on jobs and inflation. Any signal that rate policy could swing in response to price developments or to a deteriorating labor market - or that tariffs might materially alter inflationary pressures - could influence fixed income, financials and interest-rate sensitive equity sectors.
Lastly, the retreat in oil prices after last week’s spike underscores how geopolitical risk and inventory readings can inject volatility into commodities markets. The upcoming diplomatic talks could materially affect risk premia in energy markets, altering the outlook for related equities and trade flows.
For now, markets are operating within a landscape of heightened ambiguity: the judiciary has constrained one avenue of presidential authority, the executive branch has escalated trade measures through another statutory route, and global partners are seeking answers about the stability of recent accords. All of these developments will be watched closely by investors assessing the pathways for growth, inflation and corporate earnings in the months ahead.