Editor’s Note
This article discusses a significant U.S. Supreme Court ruling that invalidated a major set of tariffs, a decision with profound implications for trade policy and financial markets.
A landmark ruling by the U.S. Supreme Court has ignited a surge in financial markets, particularly precious metals. On February 20, the Supreme Court ruled 6-3 that the Trump administration’s large-scale global tariffs, implemented via executive order under the IEEPA, exceeded presidential authority and were invalid from the start. This decision is seen as a watershed moment for U.S. trade policy, effectively blocking a presidential shortcut to impose tariffs without Congressional approval.
The ruling directly fueled a market rally. U.S. stock indices reversed early losses to close higher, with the Dow Jones up 0.47%, the S&P 500 up 0.69%, and the Nasdaq up 0.90%. Precious metals saw an even more dramatic surge. COMEX gold futures rose 2.66%, breaking through the $5,100 per ounce barrier, while COMEX silver futures skyrocketed 8.9% to $85.19 per ounce.
Chief Justice Roberts emphasized in the ruling that for the president to exercise significant powers affecting the national economy, such as imposing tariffs, explicit Congressional authorization is required. It’s important to note that this ruling does not completely strip Trump of tariff powers; it only blocks the IEEPA “unilateral shortcut.” Tariffs levied under Section 232 of the Trade Expansion Act of 1962 and Section 301 of the Trade Act of 1974 remain in effect.
The removal of this tariff uncertainty provided a dual support for the stock market rally: “uncertainty convergence” and “controllable policy impact.” The ruling clarifies the legal boundaries of presidential tariff power, meaning any future large-scale tariff policies must follow established legal procedures, significantly reducing policy risk for businesses. Meanwhile, Trump’s subsequent 10% global temporary tariff, with its clear 150-day duration, 15% cap, and broad exemptions, is seen as more predictable and its impact on corporate profits as manageable.
Import-dependent large-cap tech stocks were major beneficiaries. Google (Class C) rose 3.74%, Amazon gained 2.56%, Meta and Apple rose 1.69% and 1.54% respectively, and Nvidia increased 1.02%.
On February 21, precious metals exploded higher. COMEX gold futures settled at $5,130/oz (+2.66%), while COMEX silver futures settled at $85.19/oz (+8.9%). Spot prices followed suit, with London gold fixing at $5,104.24/oz and silver at $84.353/oz.
The surge was driven by the dual resonance of the tariff ruling and escalating U.S.-Iran geopolitical tensions. While the Supreme Court ruling eliminated an extreme risk to global trade, it intensified domestic U.S. political wrangling over refunding $175 billion in already-collected tariffs, creating long-term uncertainty. Furthermore, weak U.S. Q4 2025 GDP growth of 1.4% and a rebound in core PCE inflation to 3.0% year-on-year have stoked stagflation fears, pushing investors toward gold as a hedge.
Simultaneously, U.S.-Iran tensions have escalated sharply. After a second round of indirect talks failed to bridge core differences, Trump has set a 10-15 day deadline for an agreement and publicly stated he is “considering limited military strikes against Iran.” Reports suggest the U.S. has deployed significant military force to the Middle East, with potential strikes imminent, driving war risk to a multi-year high and fueling a flight to safe-haven assets like precious metals.
Silver’s outperformance over gold is attributed to its dual role as both a safe-haven and an industrial metal. Rising demand from AI (for its superior conductivity), photovoltaics, and electric vehicles is expected to create a structural deficit. The tariff ruling’s reduction in supply chain uncertainty, combined with bullish AI demand expectations and safe-haven flows, triggered silver’s explosive rally.
Major institutions have issued bullish ratings. Morgan Stanley upgraded gold to “overweight” with a year-end target of $5,400/oz, citing domestic political uncertainty, stagflation worries, and Middle East risks. Goldman Sachs gave silver a “strong buy” rating with a 6-month target of $92/oz, citing stronger-than-expected industrial demand recovery, particularly from AI. Barclays maintained “overweight” on gold and “buy” on silver, citing a supportive Fed stance, a weaker dollar trend, and reduced investment risk post-ruling.
In summary, the U.S. Supreme Court’s overturning of Trump’s IEEPA-based global tariffs, coupled with renewed Middle East tensions, served as key catalysts for this precious metals rally. Looking ahead, two core developments warrant close attention: the formal生效 of Trump’s 10% temporary tariff on February 24 and its impact, and the approaching 10-15 day U.S.-Iran deadline, which will dictate the direction of geopolitical risk. While the bullish setup for precious metals is likely to persist in the short term, investors should be wary of a potential pullback after the news is digested. Long-term tracking of U.S. economic data, Fed policy, and global geopolitics will be crucial for timing investments.
