‘Markets hate uncertainty almost as much as they hate bad news,’ says Wealth Alliance’s Eric Diton.
President Donald Trump opened up a new round of verbal attacks against the Supreme Court on Monday, just days after the high court struck down his sweeping tariff program — creating an uneasy environment for investors in U.S. assets.
In posts on his Truth Social platform, Trump railed against what he called a “ridiculous” Supreme Court decision. “As President, I do not have to go back to Congress to get approval of Tariffs,” he wrote. In addition, Trump said any country that wants to “play games” will be met with “a much higher Tariff, and worse, than that which they just recently agreed to.”
It didn’t take very long for investors to react to this latest volley, with all three major U.S. stock indexes extending declines seen earlier on Monday. The Dow Jones Industrial Average fell 821.91 points, or almost 1.7%, to end at 48,804.06 for its worst performance since Jan. 20. The S&P 500 and Nasdaq Composite Index closed lower by 1% and 1.1%, respectively. The ICE U.S. Dollar Index slipped 0.1%, helping gold rally around 3% to more than $5,200 per ounce. Treasurys also rallied.
“In my 40 years of doing this, markets hate uncertainty almost as much as they hate bad news,” said Eric Diton, the Boca Raton, Fla.-based president and managing director at the Wealth Alliance, an investment advisory firm. “What markets are most concerned about is the rest of the world getting very frustrated with the U.S. and its policies.” For instance, the European Union, one of the U.S.’s largest trading partners, is “confused and like, ‘Enough already.’”
On Monday, EU officials reportedly said they are pausing work toward a U.S. trade deal, in order to gain more clarity first. This came after the Supreme Court’s decision on Friday, in which justices voted 6-3 to strike down the Trump administration’s tariffs on imported goods based on the 1977 International Emergency Economic Powers Act, or IEEPA. The majority opinion, written by Chief Justice John Roberts, noted that the IEEPA law did not provide clear power to impose tariffs or duties.
Rather than resolving the issue, however, the ruling led to a continued back-and-forth with Trump. The president quickly announced new global tariffs of 10% and then raised that figure to 15%.
The president’s comments on Monday further unsettled investors by directly challenging the separation of powers in the U.S., the system that divides powers and responsibilities among the three branches of government: the White House, the Supreme Court and Congress.
Before Trump made his social-media post, Thierry Wizman, a global foreign-exchange and rates strategist at Macquarie Group, had predicted such an attack by the president and said it would be “unlikely to sit well with many investors in U.S. assets.” Trump is set to deliver his State of the Union address on Tuesday, which “may put on full display the breakdown of ‘ordered liberty’ and its replacement with ‘managed chaos’ in the U.S.,” the strategist wrote in a note.
Nervousness around holding U.S. assets has contributed to the dollar’s ongoing weakness over the past year, reinforcing the appeal of precious metals like gold. Contributing to this worry have been concerns about the U.S. deficit, which came in at almost $1.8 trillion in fiscal 2025 and is prompting some foreign investors to shift away from dollar-denominated assets. “If you don’t want to own dollars, there’s not much else to own,” Diton of the Wealth Alliance said in a phone interview. On Monday, gold acted as a hedge against dollar-denominated assets and as a safe haven, he said — undercutting the argument made by others that the yellow metal has lost its haven status.
Investors turned to the U.S. Treasury market for safety during this latest round of tariff tumult, which appeared to keep a floor under the stock market. Monday’s rally in U.S. government debt sent the benchmark 10-year yield down by 5.7 basis points to almost 4.03%, based on 3 p.m. Eastern time figures from Dow Jones Market Data. That was the biggest one-day drop in more than a week.
“There’s been an amazing amount of calm in the longer-dated bond market,” said Matt Miskin, co-chief investment strategist at Manulife John Hancock Investments. That kept equities from “gyrating too much.”
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