Wall Street ended Monday deep in the red, following a Supreme Court decision that struck down President Donald Trump’s emergency tariffs, while software stocks were weighed down by concerns over rapid artificial intelligence (AI) development.
The S&P 500 fell 1% to 6,838.95, the NASDAQ Composite declined 1.1% to 22,627.27, and the Dow Jones Industrial Average dropped 1.7% to 48,804.06.
Trump Raises Tariffs to 15% After Court Decision
Over the weekend, Trump increased a temporary global import tariff from 10% to 15% after the Supreme Court ruled he had overstepped his authority in declaring an economic emergency. Using Section 122 of the 1974 Trade Act, the tariffs can remain for up to 150 days.
Michael Landsberg, CIO at Landsberg Bennett Private Wealth Management, said the move adds uncertainty for markets, noting that tariffs could become a recurring issue if the policy path continues.
Before the ruling, American consumers faced an average effective tariff rate of 16%, the highest since 1936. After the Section 122 tariffs, the rate is now 13.7%.
Several countries are seeking to renegotiate trade deals or gain clarity on U.S. tariff policy, with the European Commission urging adherence to agreements reached in 2025. Trump warned on social media that countries could face even higher tariffs if they challenge the decision.
AI Concerns Hit Software Stocks
A Citrini Research report projected a hypothetical AI-driven scenario in 2028 where widespread automation could displace white-collar jobs. The analysis triggered declines in software stocks, with the iShares Expanded Tech-Software Sector ETF (NYSE: IGV) hitting its lowest since November 2023. Companies such as Workday (NASDAQ: WDAY), Intuit (NASDAQ: INTU), and Atlassian (NASDAQ: TEAM) saw notable losses.
Michael O’Rourke, chief market strategist at Jones Trading, called the report thought-provoking but emphasized that short-term predictions remain uncertain.
Nvidia Earnings in Focus
Investors are now turning to Nvidia (NASDAQ: NVDA), which will report fiscal Q4 earnings on Wednesday. The company, a leading AI processor manufacturer, is expected to post $1.52 EPS on $65.56 billion in revenue, up from $0.89 EPS on $39.33 billion a year ago.
Oil Market Moves
Crude prices edged lower on Monday after last week’s nearly 6% surge, with Brent at $71.27 per barrel and WTI at $66.47. Investors are weighing the potential for U.S.-Iran nuclear talks in Geneva on Thursday, which could reduce disruption risks in Middle East oil supplies.
