Supreme Court might not have last word on Trump tariffs

The U.S. Supreme Court on Wednesday heard a case on the Trump administration’s “reciprocal” tariffs, and both liberal and conservative judges appeared skeptical of the legal basis of those tariffs.

Following the hearing, traders on the prediction market Polymarket think there’s only a 25% chance that Trump’s tariffs will hold, down from roughly 50% a day ago.

Markets rose after the hearing, with major U.S. indexes rebounding from Tuesday’s losses. Still, the end of tariffs wouldn’t be an unequivocal win for stocks.

If the Supreme Court compels the White House to refund billions in collected duties — a move Wolfe Research said it doesn’t see “much of a legal argument for” — it would mire the U.S. government further in debt. In turn, Treasury yields are likely to rise — as they already did on Wednesday — which could put pressure on stocks.

Meanwhile, Trump could invoke other executive powers to reinstate his tariffs, causing further unpredictability for businesses and markets.

“Uncertainty and unusual have been the two marquee words of 2025,” said Mitchell Goldberg, head of ClientFirst Strategy. “If the Supreme Court rules against the administration, I don’t think it’s the end of the road for tariff policy, it’s just another bump in the road.”

— CNBC’s Dan Mangan and Jeff Cox contributed to this report.