Market Volatility Looms as Supreme Court Deliberates Trump Tariffs

Jefferies strategists are advising investors to hedge against potential market turbulence should the Supreme Court unexpectedly uphold Trump-era tariffs. While most traders anticipate the court will strike down the measures, an adverse ruling could jolt equities and reignite trade tensions. Protective puts or volatility instruments may serve as prudent insurance, alongside allocations to tariff-resistant sectors like consumer staples.

The timing remains uncertain—the court reconvenes February 20—but the stakes are clear. A validation of the 1977 International Emergency Economic Powers Act tariffs WOULD embolden their use as political leverage, sustaining trade-related headline risk through 2026. Markets have already exhibited sensitivity: Mattel and Deere shares dipped January 9 amid delayed rulings, while Trump's revived tariff threats briefly pressured the S&P 500 this week.

Greenland's emergence as a geopolitical flashpoint underscores the persistent unpredictability of trade policy. Wednesday's 1.1% market rebound following Trump's retreat on Greenland intervention offers only temporary respite. As Jefferies notes, the specter of trade uncertainty may haunt markets all year.