Stocks had opened lower following disappointing US economic data. But equities moved decisively higher after the Supreme Court ruled six-to-three that the International Emergency Economic Powers Act (IEEPA) “does not authorize the President to impose tariffs.”
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Near 1610 GMT, the Dow Jones Industrial Average was up 0.3 percent at 49,521.49.
The broad-based S&P 500 gained 0.6 percent to 6,901.67, while the tech-rich Nasdaq Composite Index jumped 1.0 percent to 22,914.91.
Art Hogan of B. Riley Wealth Management said the ruling created greater certainty on trade policy and likely limits inflation.
“This ruling eventually becomes a lid on inflationary pressures on an imported goods level,” Hogan said, adding that the high court ruling limited Trump’s ability to impose tariffs with IEEPA “in both scope and duration.”
Earlier, US government data showed the world’s biggest economy expanded at a 1.4 percent annual rate in the October to December period, much lower than the 2.5 percent analysts forecasted.
Meanwhile, the PCE reading on pricing showed inflation rose to 0.4 percent in December from 0.2 percent in the prior month, unwelcome news for investors hoping lower inflation would prompt additional Federal Reserve interest rate cuts.