Market Weekly Outlook: The Gavel Falls on Global Tariffs as Inflationary Fears Return

Author: Zain Vawda

Date: February 21, 2026

Overview

The US Supreme Court recently ruled against the administration's broad global tariffs, citing an overreach of executive power under the International Emergency Economic Powers Act (IEEPA). This decision has significant implications for trade policy and inflationary pressures in the economy.

Key Developments

• The Supreme Court's ruling on February 20, 2026, was a 6-3 decision that struck down the legal basis for many tariffs imposed by the Trump administration.
• Despite the ruling, the administration plans to utilize alternative legal frameworks to maintain its trade agenda, indicating that high tariffs may persist.
• US financial markets reacted positively to the ruling, with major indexes rising, although concerns about a disappointing GDP growth rate of 1.4% and higher inflation data lingered.

Market Reactions

Following the Supreme Court's decision, US markets experienced a surge, with all three major indexes climbing. However, the positive sentiment was tempered by economic data showing slower growth and rising inflation, leading to increased Treasury yields and concerns over a widening fiscal deficit.

Inflation Concerns

The PCE price index rose by 0.4% month-over-month in December 2025, exceeding expectations and reigniting fears of inflation. Coupled with a 5% increase in oil prices, these factors have raised concerns about the potential for persistent inflation, complicating the economic outlook.

Looking Ahead

The upcoming week will focus on corporate earnings, particularly from Nvidia, which is seen as a bellwether for the AI sector. Additionally, key economic indicators such as the US Consumer Confidence index and Australia's Monthly CPI will be closely monitored.

Key Dates to Watch

• Feb 24: US Factory Orders
• Feb 25: Nvidia Earnings; AU Monthly CPI; US Consumer Confidence
• Feb 26: Salesforce & Snowflake Earnings; BoJ Takada Speech
• Feb 27: Japan Industrial Production; US Jobless Claims

Conclusion

The Supreme Court's decision has opened a new chapter in US trade policy, with potential implications for inflation and market stability. Investors will need to navigate this evolving landscape as corporate earnings and economic data come to the forefront.