US stocks hold relatively steady after Supreme Court strikes down Trump's tariffs

The Dow Jones Industrial Average was up 116 points, or 0.2%, as of 10:30 a.m. Eastern time, and the Nasdaq composite was 0.5% higher.

Many on Wall Street were likely expecting such a ruling from the Supreme Court, according to Brian Jacobsen, chief economic strategist at Annex Wealth Management. That likely led to markets' relatively calm reactions.

Treasury yields were mixed in the bond market following some initial squiggles up and down following the ruling. Stocks in Europe held onto their gains from earlier in the day, while the value of the U.S. dollar edged lower against other currencies.

But Jacobsen also said that he expects Trump's White House to shift to tariffs that target specific countries or industries, rather than the sweeping ones that the Supreme Court struck down.

“This will give some short-lived relief as it just delays the inevitable of tariffs from a different authority,” he said.

Like stocks, Treasury yields had likewise held relatively steady earlier in the morning following the disappointing economic reports. While the data underscored the tricky situation the Federal Reserve faces as it sets interest rates, they did not change traders’ expectations much for what the Fed will ultimately do.

One report said the U.S. economy’s growth slowed to a 1.4% annual rate during the end of 2025. That’s down from a 4.4% burst during the summer.

The second report said the measure of inflation that the Fed likes to use accelerated to 2.9% in December from 2.8% in November. An underlying measure that economists consider a better predictor of where inflation may be heading quickened to 3% from 2.8%.

What makes things difficult for the Fed is that it has no tool to fix both a slowing economy and high inflation at the same time. It could lower interest rates to give the economy a boost, as it did last year and as Trump has been demanding, but that would risk worsening inflation.

Fed officials said at their last meeting that they want to see inflation fall further before they would support cutting rates further.

Following the reports, traders are still mostly betting that the Fed will lower rates at least twice by the end of this year, according to data from CME Group. But some shifted the timing for when the cuts could begin to slightly later in the summer.

The yield on the 10-year Treasury rose to 4.09% from 4.08% late Thursday. The two-year yield, which more closely tracks expectations for Fed action, held at 3.47%, where it was late Thursday.

On Wall Street, Akamai Technologies dropped 10.2% for one of the market's sharpest losses. The cybersecurity and cloud computing company reported stronger results for the end of 2025 than analysts expected, but it gave a profit forecast for the upcoming year that fell short of estimates.

Akamai plans to spend a bigger percentage of its revenue this upcoming year on equipment and other investments. It’s the latest potential indicator of how higher prices for computer memory amid shortages created by the AI boom is affecting customers throughout the economy.

On the winning side of the market was Comfort Systems, which rose 3.8% after the provider of heating, ventilation air conditioning and electrical services reported a stronger profit for the latest quarter than analysts expected. CEO Brian Lane said his company is seeing “unprecedented demand.”

In stock markets abroad, indexes rose modestly in Europe following a more mixed finish in Asia.

The Hang Seng fell 1.1% after Hong Kong’s market reopened following Lunar New Year holidays, but South Korea’s Kospi jumped 2.3% to a record, led by major defense contractors like Hanwha Aerospace. The company is one of many benefiting from a ramp up in military spending in many countries.

AP Business Writers Matt Ott and Elaine Kurtenbach contributed.