TLDR
- Trump imposed a 10% tariff on EU goods over the weekend, impacting nearly $1.5 trillion in transatlantic trade.
- The U.S. Supreme Court will decide Tuesday on the legal basis of Trump’s previous tariff actions, after two delays.
- Markets previously saw sharp declines from similar tariffs in October; both stocks and crypto may react again this week.
- Q3 2025 GDP, November PCE inflation, and January PMI reports will provide critical updates on U.S. economic performance.
- This week includes earnings from 10% of S&P 500 companies, which may be overshadowed by legal and trade news.
Markets enter the week facing high-impact economic data and political developments, including new US tariffs and a Supreme Court ruling. These events arrive as markets reopen following the Monday closure for Martin Luther King Jr. Day. Several major economic releases and corporate earnings reports are also scheduled, which may further add to volatility.
Trump Tariffs and Supreme Court Ruling Could Pressure Risk Assets
President Donald Trump announced a 10% tariff on EU goods over the weekend, increasing trade tensions with Europe. This is the first tariff escalation since October, when markets saw a sharp downturn following similar actions.
The S&P 500 dropped, and crypto markets experienced their biggest sell-off in five years during that period. The new tariffs impact nearly $1.5 trillion in trade between the US and the European Union. European officials may consider a response that could further strain global trade routes.
Alongside this, a Supreme Court ruling on the legality of Trump’s past tariff powers is expected on Tuesday. The Court has postponed its decision twice, but now appears ready to deliver a final ruling.
Legal experts suggest a strong chance that the Court may reject the previous administration’s legal framework. If the Court rules against Trump, markets may lose confidence in the stability of trade policy. However, if the Court supports him, then the full tariff impact may need to be priced in quickly.
Economic Data and Earnings Set the Stage for Volatility
US markets remained closed on Monday for Martin Luther King Jr. Day, compressing the trading week to four active sessions. On Wednesday, investors will receive the December Pending Home Sales data, which will offer a view into the housing market’s direction.
Thursday will bring Q3 2025 GDP results, providing updated insight into economic growth. That same day, the November PCE inflation report is due, which remains a key indicator for the Federal Reserve. On Friday, January’s S&P Global PMI figures will show the latest business activity trends.
Earnings season also picks up, with 10% of S&P 500 companies scheduled to report results this week. Traders will watch for any revisions to outlooks based on current trade and legal developments.
The outcomes of both the tariff announcement and the Supreme Court ruling could overshadow fundamental results. As a result, stocks and crypto assets may face increased volatility throughout the short trading week. Market participants remain alert as legal and trade headlines take center stage.
The post US Markets Brace for Busy Week as Trump Tariffs and Court Ruling Threaten Stability appeared first on Blockonomi.
Source: https://blockonomi.com/us-markets-brace-for-busy-week-as-trump-tariffs-and-court-ruling-threaten-stability/
