What does the latest tariff turmoil mean for markets?

U.S. President Donald Trump answers questions during a press briefing held at the White House February 20, 2026 in Washington, DC following the Supreme Court ruling against the legal basis for his tariff regime. — (Image credit: Mandel NGAN / AFP via Getty Images)

Markets made a tumultuous start to the week on 23 February following fresh tariff turmoil over the weekend.

On 20 February the US Supreme Court ruled that the basis for most of the sweeping tariffs that Donald Trump imposed on US imports last year is unsound. Trump had bypassed a Congressional vote (which he might well have lost) on his flagship tariff policy by invoking the International Emergency Economic Powers Act (IEEPA).

But the Supreme Court’s ruling confirmed that the IEEPA doesn’t give the president powers to impose tariffs unilaterally.

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Following his defeat in the Supreme Court, Trump quickly invoked an obscure piece of legislation – Section 122 of the 1974 Trade Act – which gives the president the authority to impose tariffs of up to 15% for up to 150 days without Congressional approval.

“As investors become increasingly wary about US economic policy, the dollar has suffered fresh falls against a basket of currencies, with the dollar index down 0.35%,” said Susannah Streeter, chief investment strategist at Wealth Club. “Uneasiness is set to spread on Wall Street, with futures markets indicating a retreat when trading resumes later.”

How the latest tariff turmoil could affect your investments

The latest developments look to be bad news for US stocks. Despite initially rising immediately following the Supreme Court’s ruling, the S&P 500 looks to have fallen over the weekend, with S&P 500 futures down on the morning of Monday 23 February.

The FTSE 100 fell during early trading on the same day, but by 9.30am it had rallied to recover most of those losses.

The index “remains resilient amid the headwinds,” said Streeter, adding that it is “up by more than 8% year to date, with mining stocks continuing to benefit from a march higher in metals prices”.

Japan’s flagship stock market index, the Nikkei 225, fell 1.1% on 23 February, though Chinese stocks fared better with the Hang Seng index gaining 2.5%.

The price of gold opened 1.2% higher on 23 February compared to where it closed the previous week, with further geopolitical tension in Iran also helping to return the yellow metal to three-week highs.

“The precious metal climbed back above $5,160 an ounce earlier, a three-week high, before retreating slightly,” said Streeter. “The American military build-up in the Gulf has continued, with Iran so far resisting pressure from the US to restrict its nuclear development programme.”

How do the latest tariff twists impact global trade?

The short-term impact of the back and forth on tariffs over the weekend is that there is much more uncertainty over global trade.

What had looked initially like a simplification is clearly more complex given Trump’s 10% and 15% tariffs could override previously-agreed trade agreements, such as the 10% levy that goods imported from the UK were subject to following an agreement reached in May 2025.

This has prompted markets to consider how global trade will shake out in the wake of this latest disruption.

Some US trading partners are also pushing back against the new blanket tariffs.

“Bilateral deals reached through tortuous negotiations have been thrown up in the air again, creating a cloud of uncertainty,” said Streeter. “Countries are already preparing to retaliate, with the European Union looking set to halt the ratification of a deal with the US and India also postponing its negotiations to finalise an agreement.”.

In a statement, the EU Commission said “A deal is a deal. As the United States’ largest trading partner, the EU expects the US to honor its commitments set out in the Joint Statement – just as the EU stands by its commitments” in response to Trump’s threats to impose 15% tariffs.

The long-term impact of the latest tariff news for the US is also unclear.

“Trump’s Republicans only hold a narrow majority in Congress, and many of them are staunch free-traders,” said Kallum Pickering, chief economist at investment bank Peel Hunt. “It is thus not obvious that Trump will be able to rely on Congress to pass legislation to extend the new tariffs beyond 150 days.”

The Supreme Court defeat also potentially opens the door for the US government to have to repay hundreds of billions of dollars in IEEPA tariffs to importers who paid the now-defunct levies. While this could spark “potential legal battles and administrative chaos”, Pickering also believes it could support US domestic demand by transferring profits and revenues back to US businesses.

If so, that could theoretically benefit more domestically-focused US small cap stocks.

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Dan is a financial journalist who, prior to joining MoneyWeek, spent five years writing for OPTO, an investment magazine focused on growth and technology stocks, ETFs and thematic investing.

Before becoming a writer, Dan spent six years working in talent acquisition in the tech sector, including for credit scoring start-up ClearScore where he first developed an interest in personal finance.

Dan studied Social Anthropology and Management at Sidney Sussex College and the Judge Business School, Cambridge University. Outside finance, he also enjoys travel writing, and has edited two published travel books.