Key Stocks to Watch Ahead of the Supreme Court’s Decision on Trump-Era Tariffs

A major US Supreme Court decision on the legality of the sweeping tariffs President Donald Trump imposed in April the same measures that briefly sent global markets into a sharp downturn could become the next major catalyst for a stock market that has been powering higher.

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Since the market bottomed following that tariff shock, the S&P 500 has rebounded an impressive 39%. The benchmark closed at a fresh record on Thursday, helped by the fact that actual tariff levels ended up being far lower than Trump’s most aggressive proposals, and supported by continued momentum in artificial intelligence investment and an economy strong enough to generate record corporate earnings.

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But if the Supreme Court rules that Trump overstepped his authority by implementing broad, across-the-board tariffs on dozens of countries, investors may still be left with lingering uncertainty. The White House could try to reintroduce targeted levies using other existing statutes. Bond markets may also respond by pushing yields higher if traders grow more concerned about the deficit. That type of move could eventually spill back into equities.

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A decision this year, however, is becoming less likely. The court held its final scheduled session of the year on Wednesday and will not reconvene until Jan. 9. Typically, the justices issue opinions in argued cases from the bench, usually after a public notice that decisions are forthcoming.

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Whenever the ruling arrives, many traders believe the immediate market reaction would likely favor equities if the court overturns the tariffs. A decision upholding them could produce the opposite effect.

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There are several reasons for that. Removing the tariffs essentially eliminates a tax burden that many companies have not been able to fully pass on to consumers, weighing on profit margins. Companies might also receive refunds for duties already paid, creating a sudden earnings boost. Consumers could benefit as well. Democratic lawmakers estimate that tariffs have cost the average US household roughly $1,200 over the past 10 months.

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Overall, striking down the tariffs could lift S&P 500 company earnings before interest and taxes by 2.4% in 2026 relative to current-year projections, according to Ohsung Kwon, Chief Equity Strategist at Wells Fargo, who published the estimate in October.

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“That’s broadly supportive for the market because investors view tariffs as a direct tax,” said James St. Aubin, Chief Investment Officer at Ocean Park Asset Management. “This could act as a spark for a short-term rally.”

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Some companies stand to benefit more than others. Tariffs have been particularly challenging for firms that rely heavily on imported goods especially apparel brands and toy manufacturers. Financial companies could also gain as consumer sentiment improves and spending accelerates.

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Haris Khurshid, Chief Investment Officer at Karobaar Capital, noted that while consumer-facing importers could rally, “materials, commodities and domestic producers that benefited from protectionism might lag a bit.”

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Here is a deeper look at the sectors and companies most exposed to the upcoming Supreme Court decision:

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Apparel and toy makers that depend on imports from China and other Asian markets hit with the steepest tariffs are viewed as clear winners if the levies are struck down. Nike and Mattel are often cited as leading beneficiaries.

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Other names include Deckers Outdoor, Under Armour, Crocs and American Eagle Outfitters all of which have dealt with ongoing tariff-related uncertainty. Home furnishing retailers have also seen uneven trading, including Wayfair, Williams-Sonoma and RH.

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Texas Capital analyst Eric Wold highlighted several leisure-focused companies that could benefit as well, including Brunswick, Funko and Topgolf Callaway Brands.

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ZLarge industrial manufacturers such as Caterpillar and Deere are expected to gain meaningfully from tariff refunds, according to Wells Fargo’s Kwon. Other potential beneficiaries include Stanley Black & Decker, Fortive and Lennox International.

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Automakers Ford and General Motors enjoyed a bump during last month’s Supreme Court hearing when justices appeared skeptical of the administration’s defense. While the case doesn’t directly affect the industry-specific auto tariff, both companies would still benefit from a healthier consumer environment.

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Transport-related companies could also get a lift. Hedgeye expects a near-term boost for shipping and logistics stocks if tariffs are overturned and importers accelerate purchases ahead of any potential new rules. That would benefit UPS, FedEx and several trucking carriers.

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Major banks including JPMorgan Chase and Goldman Sachs faced bouts of volatility earlier this year, along with private equity firms such as Blackstone, as investors worried that Trump’s trade war could drag down economic growth. Fintech names like Affirm and Block have also been sensitive to shifts in consumer sentiment, while crypto-linked stocks remain highly volatile.

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Lower tariffs could ease pressure on US households and help stabilize the broader economy. If inflation expectations fall, the Federal Reserve would have more room to lower interest rates, said Clear Street analyst Owen Lau.

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Lower rates tend to encourage loan demand, refinancing activity, stronger equity markets and healthier consumer spending all of which are supportive for financial stocks. “That combination,” Lau said, “fundamentally benefits the sector as a whole.”

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