in New York, U.S. equity futures dipped as investors weighed a federal appeals court decision that found most of former President Donald Trump’s global tariffs unlawful, adding fresh trade-policy uncertainty as the typically weak month of September begins.
Key Takeaways
- Dow futures down 107 points (-0.23%); S&P 500 -0.22%; Nasdaq 100 -0.28% early Tuesday.
- A U.S. Court of Appeals for the Federal Circuit panel ruled 7-4 that sweeping tariffs invoked by Trump exceed executive authority.
- Trump called the decision “Highly Partisan” and plans to appeal to the U.S. Supreme Court.
- Jefferies’ Aniket Shah says a Supreme Court curb on IEEPA for reciprocal tariffs could lower long-run escalation risk but raise near-term uncertainty.
- September has been seasonally weak: S&P 500 averaged a 4.2% drop over the past five years and more than 2% over the past 10.
- Questions about Federal Reserve independence persist; a bid to temporarily bar Trump from firing Governor Lisa Cook saw no ruling Friday.
- Trump nominee Stephen Miran faces a Senate Banking Committee hearing on Sept. 4.
- August closed higher: Dow >3%, S&P 500 ~2%, Nasdaq +1.6%; traders await Friday’s U.S. jobs report ahead of a mid-month Fed decision.
Verified Facts
U.S. stock index futures were modestly lower early Tuesday. Dow Jones Industrial Average futures fell 107 points, or 0.23%. S&P 500 futures slipped 0.22%, and Nasdaq 100 futures declined 0.28%.
The moves followed a 7-4 ruling by the U.S. Court of Appeals for the Federal Circuit on Friday that determined most of Trump’s global tariffs, including so-called reciprocal tariffs, were not authorized under the law he cited. The court emphasized that broad tariff authority resides with Congress.
Trump criticized the decision as “Highly Partisan” and said he would seek review by the U.S. Supreme Court. Markets are now handicapping the chances of a stay and the potential for select trade pacts to be revisited if the ruling stands.
Aniket Shah, who leads sustainability and transition strategy at Jefferies, wrote that a Supreme Court decision limiting use of the International Emergency Economic Powers Act (IEEPA) for reciprocal tariffs would likely reduce the risk of broad tariff escalation over time, though it could inject short-run uncertainty as terms are reworked.
Seasonality may compound nerves: September has historically been the weakest month for equities, with the S&P 500 averaging a 4.2% decline over the last five years and more than 2% on average over the past decade.
Context & Impact
The ruling introduces a new variable for companies exposed to cross-border duties—particularly multinationals in industrials, consumer goods, and portions of tech hardware—while potentially easing the odds of an across-the-board tariff hike if higher courts affirm limits on executive authority.
At the same time, policy risk around the Federal Reserve has crept into the foreground. A hearing seeking to temporarily prevent Trump from dismissing Fed Governor Lisa Cook concluded Friday with no ruling. Separately, Stephen Miran, a Trump nominee, is slated for a Senate Banking Committee hearing on Sept. 4. Markets will watch these developments for implications on central bank independence.
Despite the headline risk, equities enter September from a position of relative strength. In August, the Dow rose more than 3%, the S&P 500 gained nearly 2%, and the Nasdaq advanced 1.6%, marking a fourth straight monthly climb for the S&P 500.
This week’s main macro catalyst is Friday’s U.S. employment report for August, which could shape expectations for the Federal Reserve’s interest-rate decision expected in the middle of the month.
Futures Open vs. Overnight Shift
Futures initially opened slightly higher Monday night—Dow +19 points, S&P 500 +0.11%, Nasdaq 100 +0.14%—before slipping as investors digested the legal and policy headlines and awaited labor data.
Official Statements
“Tariffs are a core Congressional power.”
U.S. Court of Appeals for the Federal Circuit
Trump called the ruling “Highly Partisan” and said he would appeal to the Supreme Court.
Donald Trump
Unconfirmed
- Whether the Supreme Court will stay the Federal Circuit ruling during appeal.
- Which specific tariff programs might be suspended or renegotiated if the decision is upheld.
- Outcome and timing of the request to temporarily bar the firing of Federal Reserve Governor Lisa Cook.
- Prospects for Stephen Miran’s confirmation and its policy implications.
- The degree to which the August jobs report will alter the Fed’s mid-month rate decision.
Bottom Line
Trade-policy uncertainty has re-entered the frame just as September’s seasonal headwinds arrive. A potential Supreme Court review could ultimately reduce the risk of broad tariff escalation, but near-term volatility may rise as legal and policy outcomes are clarified and as investors parse Friday’s jobs report ahead of the Fed’s next decision.