US stocks rise following trade ruling; ASX expected to open cautiously

US markets closed the previous week with gains as investors assessed growth data and new trade risks. The Supreme Court’s decision to strike down most of President Donald Trump’s tariff policy under the International Emergency Economic Powers Act eased concerns about rising import costs and inflation.

The S&P 500 increased by 0.69% to 6,909.51, the Nasdaq Composite rose by 0.9% to 22,886.07, and the Dow Jones Industrial Average added 230 points, or 0.47%, closing at 49,625.97. Despite weaker-than-expected economic data causing a 200-point drop earlier in the day, the Dow managed to recover. The S&P 500 saw a weekly gain of 1.1%, the Nasdaq climbed 1.5%, halting a five-week losing streak, and the Dow rose by 0.3%.

Stocks influenced by global trade experienced an upswing, with Amazon climbing more than 2%, and retailers like Home Depot and Five Below also recording gains. Although the market anticipated the decision, uncertainty lingers regarding potential refunds of previously collected tariffs.

Economic data released earlier painted a mixed picture of growth. The fourth-quarter US GDP expanded by 1.4%, falling short of the expected 2.5%, as the Commerce Department attributed the slower growth to the government shutdown. In contrast, the core PCE, the Federal Reserve’s preferred inflation measure, remained at 3% in December, surpassing the central bank’s 2% target.

Late last Friday, the White House announced a new 10% global tariff, introducing fresh uncertainty and impacting market sentiment as investors prepare for the upcoming week.

Looking ahead to the Australian market, traders are gearing up for a potentially volatile start on Monday as they digest the evolving US trade policy. Initial indications hinted at a modest gain of around 0.2%, but sentiments turned cautious following the introduction of new tariffs through alternative trade legislation.

Investors are keeping an eye on the final week of reporting season, with companies like Ampol, Lendlease, and NIB expected to report. Globally, market participants are eager for Nvidia’s earnings later in the week, which could influence sentiment towards technology stocks.

In summary, the US markets saw positive growth last week amidst fluctuations in economic data and trade policy changes. The anticipation of future developments and their potential impact on global markets keeps investors on edge as they navigate through these uncertain times.