Trump Doubles Down On Tariffs After Supreme Court Blow: The Week On Wall Street

by | Feb 20, 2026 | General

It was shaping up to be a relatively quiet week for markets, until Friday delivered a cascade of market-moving headlines.

Fresh economic data showed the U.S. economy expanded at just a 1.4% annualized pace in the fourth quarter, a sharp slowdown from 4.4% in the prior quarter and well below expectations for 3% growth.

• State Street SPDR S&P 500 ETF Trust stock is trading near recent highs. What’s the outlook for SPY shares?

At the same time, the Federal Reserve’s preferred inflation gauge accelerated to a 3% annual rate in December, with the monthly increase of 0.4% marking the fastest pace since February.

President Donald Trump pointed to the prolonged government shutdown as a key driver of the weak growth print, arguing it shaved at least two percentage points off GDP.

But the real jolt came hours later, when the Supreme Court issued a landmark decision striking down the administration’s tariff authority under the International Emergency Economic Powers Act (IEEPA).

The Court ruled that IEEPA does not authorize the president to impose tariffs, grounding its reasoning in separation of powers. “

“The Framers gave ‘Congress alone’ the power to impose tariffs during peacetime,” the Court wrote, adding “the whole power of taxation rests with Congress.”

The Court did not address whether the administration must refund more than $130 billion in tariffs already collected under the emergency declarations.

“The good news is that there are methods, practices, statutes and authorities… that are even stronger than the IEEPA tariffs available to me,” Trump said in a press conference following the decision.

In response to Court’s ruling, Trump unveiled a new 10% global tariff under Section 122 of the Trade Act of 1974 and confirmed that existing Section 232 and Section 301 tariffs remain “fully in place and in full force and effect.”

He said, “We have alternatives. Great alternatives. I can charge much more than I was charging,” he added.

Trump suggested the refund issue could face years of litigation.

A day earlier, trade data revealed another blow for the America First agenda.

The U.S. goods and services deficit widened to $70 billion in December, while the full-year 2025 trade gap reached $901 billion — essentially unchanged from 2024 — suggesting tariffs have had no impact on narrowing the imbalance, a central goal of the administration’s policy.

Meanwhile, economists and policymakers are increasingly focused on artificial intelligence’s growing impact on the labor market.

Federal Reserve Governor Michael Barr recently flagged mounting challenges for younger workers in digital services.

In an exclusive interview with Benzinga, Oxford Economics economist Nico Palesch warned that advances in robotics could soon disrupt physical jobs, potentially affecting up to 20% of the workforce.

Weekly Market Performance Recap (as of Friday 2 p.m. ET)

  • SPDR S&P 500 ETF Trust (NYSE:SPY): +1.2%
  • Invesco QQQ Trust (NASDAQ:QQQ): +0.9%
  • SPDR Dow Jones Industrial Average ETF Trust (NYSE:DIA): +0.05%
  • iShares Russell 2000 ETF (NYSE:IWM): +0.18%
  • Best Sector – Industrial Select Sector SPDR Fund (NYSE:XLI): +2.6%
  • Worst Sector – Consumer Staples Select Sector SPDR Fund (NYSE:XLP): -1.6%

S&P 500 Top Performers (5-Day Change):

S&P 500 Top Laggards (5-Day Change):

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