In a landmark 6-3 decision, the U.S. Supreme Court struck down President Trump's sweeping global tariffs on Friday, ruling the administration "overstepped its constitutional authority" by using emergency powers under the International Emergency Economic Powers Act (IEEPA) to bypass Congress. The ruling invalidated tariffs that had generated $142 billion in revenue in 2025, much of it from the technology sector.
Markets reacted instantly with a relief rally, led by major tech stocks. Alphabet (Google) surged 4%, while Meta and Amazon each gained 2%. Semiconductor firms like SanDisk climbed 2.5% and Micron added 1.5%. Nvidia saw a more modest 1% increase. The broader S&P 500 rose 0.7% on the day.
The rally is rooted in the immediate cost relief for tech supply chains. For companies like Micron and SanDisk, whose components cross multiple borders, the removal of import taxes is a direct financial benefit. Hyperscalers like Google, Amazon, and Meta, which spend billions on data center hardware, stand to see improved margins from cheaper components.
However, analysts warn the rally may be built on a "foundation of sand." Three major threats loom that are unrelated to tariffs. First, the rise of Agentic AI from firms like Anthropic and OpenAI threatens the core SaaS business model by potentially replacing human users, eroding the pricing power of legacy giants like Salesforce.
Second, escalating geopolitical tensions, particularly a 15-day ultimatum to Iran from the White House, have sent oil prices to year-to-date highs. This creates a "risk-off" sentiment that could trigger a rotation out of high-valuation tech stocks and increase operational costs for data centers.
Finally, the legal battle is not over. Experts caution the administration could pivot to more narrow, commodity-based, or sector-specific trade actions not addressed by the ruling, potentially reinstating trade pressures within weeks. Furthermore, an estimated $170 billion in potential duty refunds could be tied up in the U.S. Court of International Trade for years.
Notably, the ruling does not affect existing U.S. chip export restrictions to China, a key reason for Nvidia's tempered response, as the company has already excluded China from its near-term revenue guidance.
