Major U.S. stock indices closed higher on Friday. The U.S. Supreme Court ruled that the President does not have the authority to unilaterally impose broad tariffs on nearly all countries under federal emergency powers law, dealing a significant blow to a signature economic policy. The Court ruled that the International Emergency Economic Powers Act (IEEPA) does not authorize the President to levy tariffs, upholding a lower court ruling from the U.S. Court of Appeals for the Federal Circuit that found the tariffs unlawful. For the week, all three major U.S. stock indices posted gains: the Dow Jones Industrial Average rose 0.25%, the S&P 500 climbed 1.07%, and the Nasdaq Composite advanced 1.51%.

At market close, the Dow Jones Industrial Average increased by 230.81 points, or 0.47%, to 49,625.97. The Nasdaq Composite gained 203.34 points, or 0.90%, reaching 22,886.07. The S&P 500 rose by 47.62 points, or 0.69%, settling at 6,909.51. Notable stock performers included Google, which rose over 3.7%, Amazon, up more than 2.5%, Apple, increasing over 1.5%, and NVIDIA, gaining more than 1%.

In European markets, the German DAX 30 index advanced by 231.37 points, or 0.92%, to 25,249.35. The UK's FTSE 100 index climbed 63.16 points, or 0.59%, to 10,690.20. France's CAC 40 index rose 116.71 points, or 1.39%, to 8,515.49. The Euro Stoxx 50 index increased by 70.58 points, or 1.16%, to 6,130.20. Spain's IBEX 35 index was up 162.72 points, or 0.90%, at 18,180.22. Italy's FTSE MIB index jumped 675.28 points, or 1.47%, to 46,469.50.

In the cryptocurrency market, Bitcoin rose over 1.5% to $68,054, while Ethereum increased more than 1% to $1,970.62.

International crude oil futures settled nearly flat for the day but posted weekly gains exceeding 5%. The March WTI crude contract settled down 0.06% at $66.39 per barrel, rising 5.56% for the week. The April Brent crude contract settled up 1.4% at $71.76 per barrel, gaining 5.92% over the week.

Spot gold rose over 2% to $5,107.93 per ounce. Spot silver surged more than 7.7% to $84.645 per ounce.

U.S. inflation data for December showed a larger-than-expected increase, reinforcing expectations that the Federal Reserve will hold interest rates steady until at least June. The core Personal Consumption Expenditures (PCE) price index, a key inflation gauge favored by the Fed, rose 0.4% month-over-month in December, exceeding economist forecasts of a 0.3% increase. Annually, the core PCE rate increased to 3.0%, up from 2.8% in November. This data was included in the preliminary fourth-quarter GDP report released Friday. Despite a modest rise in the Consumer Price Index reported last week, services inflation remains persistent, with economists also noting a sharp increase in legal services prices in January.

The U.S. economy grew at an annualized rate of 1.4% in the fourth quarter, adjusted for inflation, slower than the previous quarter's 4.4% pace. For the full year 2025, the economy grew 2.2%. The slowdown was attributed to a record government shutdown, weak consumer spending, and soft trade. The government shutdown was estimated to have reduced GDP by approximately 1 percentage point. Despite the year-end slowdown, the data concluded a generally solid year for the economy, which rebounded after a contraction early in the year, supported by the abandonment of the most severe tariff measures and interest rate cuts from the Fed.

U.S. business activity growth slowed in February to its weakest pace in ten months, according to S&P Global. The flash U.S. Composite PMI Output Index fell to 52.3 in February from 53.0 in January, driven by reduced factory orders, slower growth in new service sector business, and a broad stagnation in employment growth. A reading above 50 indicates private sector expansion. S&P Global's Chief Business Economist noted the PMI data suggests an annualized GDP growth rate of about 1.5% so far this year, indicating a significant slowdown from the strong growth seen in the second half of last year.

The President stated that all existing national security tariffs, Section 232 tariffs, and Section 301 tariffs remain in full effect. He announced an executive order to impose an additional 10% global tariff on top of normal duties for 150 days under Section 122 authority. He also indicated the initiation of several new Section 301 investigations and other probes to protect against unfair trade practices, expecting the new 10% tariff to take effect in approximately three days.

The Treasury Secretary stated that tariff revenue for 2026 is expected to remain "largely unchanged" despite the Supreme Court ruling, as the administration will utilize alternative legal authorities, including Sections 122, 232, and 301. He emphasized that no one should expect a decline in tariff revenues.

Analysts at Jefferies suggested that several sectors could benefit from the Supreme Court's rejection of the tariffs, primarily consumer-driven categories such as retail, restaurants and beverages, beauty and personal care, food and staples, apparel and footwear, and homebuilding and construction. They noted the ruling also reduces policy uncertainty and global tensions, potentially strengthening institutional checks on the executive branch, which they view as favorable for U.S. equities.

A Federal Reserve official stated that the neutral interest rate might be 0.25 to 0.50 percentage points lower than the current policy rate. He added that if inflation were to move in the "wrong direction" and begin rising, the Fed would have to consider rate hikes as an option. He projected U.S. GDP growth of 2.4% in 2026, 2.1% in 2027, with a return to trend growth by 2028. He also noted that significant forthcoming fiscal stimulus would have an expansionary effect on the economy but would add pressure to inflation.

Analysis from Bank of America indicated that U.S. equities are attracting their smallest share of global fund inflows since 2020. For every $100 flowing into global equity funds year-to-date, only $26 is directed to U.S. stocks, the lowest proportion since 2020 and down from a peak of $92 in 2022. This suggests a relative decline in the theme of U.S. exceptionalism, driven by concerns over excessive AI spending by large tech firms, potential dollar weakness from administration policies, and a growing investor preference for cyclical stocks benefiting from global economic growth.

In corporate news, NVIDIA is reportedly close to investing $30 billion in OpenAI as part of a long-planned funding round. This investment would effectively replace a previously contemplated larger agreement between the two companies. Initial reports in late January had indicated that a potential $100 billion investment announced in September had stalled.