Wall Street’s major indexes edged lower Friday as renewed uncertainty over U.S. tariff policy weighed on investor sentiment, capping what had been a week of strong gains. The S&P 500 slipped 0.08% and the tech-heavy Nasdaq fell 0.11%, with traders reacting to a flurry of legal developments and mixed signals from the White House on the future of President Trump’s sweeping tariffs.
The market’s cautious tone followed a dramatic week in Washington, where a federal trade court ruled that President Trump had overstepped his authority in imposing broad-based tariffs on imports from dozens of countries.
The court found that the emergency powers invoked by the administration did not grant the president “unbounded tariff authority,” casting doubt on the legal foundation of Trump’s recent trade actions. However, just a day later, a federal appeals court temporarily stayed that decision, allowing the tariffs to remain in effect while the administration appeals—a process likely to end up before the Supreme Court.
This legal limbo has left investors grappling with heightened uncertainty. While the prospect of lower tariffs would typically be welcomed by markets, the lack of clarity over the ultimate outcome has fueled volatility. Analysts note that markets generally prefer the certainty of a known tariff regime—even if it means higher costs—over the unpredictability of ongoing legal battles and policy reversals.
Adding to the unease, President Trump escalated rhetoric against China, accusing Beijing of breaching recent trade agreements and signaling a tougher stance ahead. This comes less than a month after a temporary truce was reached between the world’s two largest economies, raising fresh doubts about the durability of any trade détente.
The Federal Reserve’s latest meeting minutes also contributed to the cautious mood, with officials highlighting the risk that tariffs could stoke inflation while simultaneously dampening economic growth. The central bank’s “wait-and-see” approach on interest rates reflects the complex interplay between trade policy, inflation, and the broader economic outlook.
For investors, the week’s developments underscore the challenges of navigating a market buffeted by policy uncertainty. As the legal and political battles over tariffs continue, Wall Street remains on edge, with many waiting for clearer signals before making their next moves.
