Supreme Court narrows trade uncertainty

February 20, 2026 at 21:00 UTC

5 min read

Supreme Court building with trade policy documents and rising yield charts, SCOTUS, US markets

Key Points

SCOTUS ruling that IEEPA does not authorize broad presidential tariffs removed a major source of trade-policy uncertainty and prompted a U.S. risk-on equity move.
Advance Q4 GDP and 0.4% December PCE showed a growth-inflation mix that reduced near-term Fed cut odds and put upward pressure on Treasury yields.
S&P Global flash PMIs signaled cooling U.S. private-sector momentum while stronger euro-area PMIs and a 1.8% UK retail sales jump supported European risk assets.
Sectors XLC, XLY and XLF outperformed while XLE and XLV lagged; RNG and LGN led gainers while FROG and DNOW were the largest decliners.

Global Market Summary

U.S. benchmarks rose after the U.S. Supreme Court ruling narrowed trade-policy uncertainty and markets digested mixed growth and inflation prints: the S&P 500 (SPX) gained 0.65%, the Nasdaq Composite (^IXIC) added 0.87% and the Dow Jones (DJIA) rose 0.41%. European shares outperformed on firmer PMIs and UK retail strength, with the CAC 40 (FRA40) up 1.39%, the DAX (DAX) up 0.87% and the FTSE (UKX) up 0.56%, while Asia lagged as the Hang Seng (HSI) fell 1.10% and the Nikkei (NKY) fell 1.12%.

Top Movers

Sectors: XLC (+1.39%), XLY (+0.97%) and XLF (+0.57%) were top performers; XLE (-0.68%) and XLV (-0.25%) lagged. Notable movers: RNG (+33.19%) and LGN (+16.44%) led gainers; FROG (-25.40%) and DNOW (-19.23%) were the largest decliners.

Macro highlights

The BEA's advance Q4 GDP estimate showed 1.4% annualized growth while December PCE rose 0.4% m/m (core PCE +0.4% m/m), a mix that reduced odds of near-term Fed rate cuts and put upward pressure on Treasury yields as markets weighed weaker growth against stickier inflation. S&P Global flash PMIs signaled cooling U.S. private-sector momentum (Composite ~52.3) even as euro-area PMIs and UK data surprised to the upside and UK retail sales jumped 1.8% m/m, supporting European risk assets and tempering near-term Bank of England easing expectations.

News that moved markets

The U.S. Supreme Court's 6-3 decision that IEEPA does not authorize broad presidential tariffs removed a major source of trade-policy uncertainty and prompted a risk-on move in U.S. equities. Corporate headlines included Balchem's record fourth-quarter results and dividend increase (BCPC), Bitdeer's upsized $325m convertible notes pricing (BTDR) that raises liquidity and potential dilution, and PDS Biotech's Phase-3 protocol amendment (PDSB) adding PFS as an interim endpoint that could accelerate regulatory timing. Virgin Music Group completed its acquisition of Downtown. Announced transactions included Finovifi's acquisition of Turner Software Technologies and RevSpring's purchase of TrustCommerce, with additional announced deals targeting ingredients, safety and software services.

Upcoming session watchlist

DE Ifo Business Climate (FEB) — consensus 88.4 vs 87.6 prior, Feb 23, 09:00 AM | Gauges business sentiment and overall near-term growth momentum.
US Chicago Fed National Activity Index (DEC) — forecast 0.1 vs -0.04 prior, Feb 23, 01:30 PM | Aggregates activity indicators to track growth relative to trend.
US Factory Orders MoM (DEC) — forecast -1.5% vs 2.7% prior, Feb 23, 03:00 PM | Indicates demand for manufactured goods and near-term production momentum.
KR Consumer Confidence (FEB) — forecast 111 vs 110.8 prior, Feb 23, 09:00 PM | Measures household sentiment that guides spending and domestic demand.

Key Takeaways

U.S. benchmarks rose after the Supreme Court ruling and mixed growth and inflation prints, with major indices closing higher on a risk-on impulse.
European equities outperformed on firmer PMIs and a UK retail sales jump, while Asian markets lagged as the Hang Seng and Nikkei fell.
Treasury yields rose as markets weighed weaker growth against stickier inflation, which reduced odds of near-term Fed rate cuts.
Corporate results, convertible issuance and deal activity produced idiosyncratic moves, including Balchem's strong quarter and Bitdeer's upsized convertible pricing.