To The Moon

Fri, 9 Jan 2026 deadline came and went, without the Supreme Court of the United States (SCOTUS) ruling on Trump’s "Liberation Day" tariffs.

It has all along been a practice of SCOTUS, not to announce in advance what cases will be decided.

As such, the financial world is now looking toward Wed, 14 Jan 2026, as the next likely date for a verdict.

After the SCOTUS’s decision:

• Attention will fall on US Treasury Secretary Scott Bessent (how he will react to court’s decision).

• Projected consequences for the US stock market and retail sector.

The "IEEPA" Showdown

The core of the legal battle rests on the International Emergency Economic Powers Act (IEEPA) of 1977.

The Trump administration argues that the $1.2 trillion trade deficit and the fentanyl crisis constitute a "national emergency" justifying worldwide tariffs, although US lower courts have already ruled that the President overstepped his authority.

US Treasury Secretary Scott Bessent has attempted to manage market expectations by describing the potential ruling as a "mishmash" or a fragmented outcome.

Bessent’s primary concern is not the immediate loss of revenue, but rather the loss of "negotiating leverage" that the President enjoys through broad, flexible emergency powers.

He has asserted that the Trump administration can pivot to other legal statutes.

He has signaled that the administration is ready to maintain these levies through alternative avenues (such as Section 301 or Section 232) should the IEEPA justification fail.

US Stock Market Reaction.

Many analysts believed that if the Supreme Court deems the tariffs illegal, US market reaction is expected to be firstly a volatile "Relief Rally" followed by a "Liquidity Shock."

Initial Relief Rally:

• Stocks, particularly those of multinational corporations (MNCs) and heavy importers, are expected to surge initially.

• This is because the removal of a "trade tax" essentially boosts corporate profit margins overnight.

• Analysts at $Wells Fargo(WFC)$ estimate that striking down the tariffs could lift S&P 500 earnings by roughly +2.4%, this year alone.

"Liquidity Siphon" Warning:

• Conversely, other analysts warn that if the Court orders retroactive refunds (estimated between $150 billion - $200 billion), it could paradoxically hurt the bond market.

• To pay these refunds, US Treasury would likely need to issue massive amounts of new debt, potentially pushing Treasury yields higher and "sucking liquidity" out of the financial system.

"Workaround" Uncertainty:

• Any rally may be short-lived.

• Especially, if the market perceives that the administration will immediately re-impose tariffs under different laws, the "uncertainty discount" will return, keeping stocks in a sideways "repair phase."

US Market - Technical Guide.

Technical analysis of S&P 500 (as of 8 Jan 2026)

Currently, the $S&P 500(.SPX)$ index exhibits a technically constructive but increasingly tense posture.

The index currently trades near 6,921 (as of 8 Jan 2026 closing), maintaining its position above key long-term trendlines despite significant looming political and legal catalysts.

Moving Averages.

Its moving averages provide a snapshot of the market’s current health:

(1) 20-Day MA (~6,880):

• The short-term indicator has been the primary battleground in the first week of January.

• The index is hovering just above it, signaling a period of consolidation & hesitation.

• It is effectively "coiling," waiting for a clear signal to either (a) break out toward 7,000 or (b) retreat toward the 50-day support.

50-Day MA (~6,816):

• Serving as the medium-term benchmark, the S&P 500 recently recaptured and holds this level.

• Current price action at 6,921 sits just 1.5% above the 50-day, suggesting that while the medium-term trend is upward, the index is vulnerable to a "mean reversion" if a negative catalyst arrives.

200-Day MA (~6,311):

• This long-term "floor" reflects the robust structural uptrend of 2025.

• The index is trading roughly 9.6% above this level, indicating a healthy long-term bull market.

• A significant gap often suggests a "buy-the-dip" mentality remains the dominant long-term strategy.

LIke it or not, the moving averages suggest the index is in a "wait-and-see" mode, with the Supreme Court's impending ruling on Trump’s IEEPA tariffs acting as the primary pivot point.

Who Benefits ?

US retailers stand to be the single largest beneficiaries.

Retailers have been paying an estimated incremental tariff of 20%, much of which they have been unable to fully pass on to consumers.

An overrule would provide two massive tailwinds:

(1) Immediate Margin Expansion:

• Companies like $Costco(COST)$, Dick’s Sporting Goods, and $Wayfair(W)$ would see an immediate drop in Cost of Goods Sold (COGS).

(2) Refund "Windfall":

• Over 700 companies have already filed lawsuits to secure refunds.

• If the Court rules that the Trump government must pay back duties already collected, it would be the equivalent of a massive, unexpected cash injection for companies like $Mattel(MAT)$, $Hasbro(HAS)$ and Crocs, that could be used for buybacks, dividends, or expansion.

Top 3 Sectors to Benefit.

(1) Consumer Discretionary (Apparel & Toys):

• This sector is most heavily reliant on imports from China and Southeast Asia.

• Companies like $Nike(NKE)$ and Mattel have thin margins that are highly sensitive to 10%–50% tariff swings.

(2) Technology & Electronics (Hard Goods):

• Domestic electronics retailers and hardware manufacturers that source components globally would see a significant reduction in supply chain costs.

• This includes companies in the semiconductor and consumer electronics space that have been navigating a "fragmented" trade map.

(3) Industrial Manufacturing:

• Large-scale manufacturers like $Caterpillar(CAT)$ and $Deere(DE)$ often import specialized parts.

• An overrule would not only lower their production costs but also potentially trigger hundreds of millions in tariff refunds, providing a significant boost to their 2026 balance sheets.

My viewpoints : (mine only)

As an outsider looking at how divisive and disruptive the incumbent government has been since late January 2025, an overrule verdict from its Supreme Court will definitely be a piece of welcoming news.

The ruling party did have some salient policies rolled out, but they are far, few and in-between.

The court indicated on its website that it has set Friday as an opinion day, suggesting that it will release decisions in argued cases. However, nothing is confirmed until the verdict is out.

In the event that the Supreme Court does hand out a verdict, I will still not jump into US market immediately.

It will be prudent to allow the uncertainties to play out first before deciding the next action course because according to market analysts, the euphoria may be ‘short-lived’.

Lurking in the shadow of "replacement tariffs" means that the victory for retailers and industrials may be a matter of "when," not "if," the next trade barrier rears its ugly head.

Given the Treasury Secretary’s stated intent to utilize Section 301 or Section 232 to reinstate trade barriers, investors must consider the inevitability of renewed protectionist measures.

The steady rise in 10-year and 30-year US Treasury Bond yields since mid-October 2025 suggests that investors are pricing in the inflationary risks and fiscal volatility associated with these anticipated trade disruptions. (see above)

I have identified the sectors & stocks likely to benefit from Trump tariffs overrule. Each investor should track their preferred stock/s and decide on the best entry or exit timing.

Remember to check out my other posts. (See below). Help to Repost ok, Thanks.

• NFLX vs PSKY Clash : Best Entry Is Now !

• XLE, XLF & XLY - Sectors to invest in 2026 !

• GOOG Rises To $5 Trillion In 2026 ? Possible ?

• Do you think US Supreme Court will overrule on Trump’s internation tariffs’?

• Do you think US market will rally and then dip as predicted by Wall Street analysts ?

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