By VK Sharma
In a move likely to positively impact global markets this week, the US Supreme Court on Friday rejected the global tariffs imposed by President Trump in April 2025. The judgment now triggers a complex process to refund the billions of dollars collected by the US government.
Immediately after the verdict, Trump signed a proclamation imposing a 10% duty on all articles imported into the United States, under Section 122 of the Trade Act of 1974. On Saturday, he raised the duty further to 15%, the maximum allowed under Section 122.
The section allows the president to impose temporary import restrictions of up to 15% for a maximum of 150 days to address serious balance-of-payments issues. The move doesn’t initially require Congressional approval but would eventually need its nod to extend it beyond the 150-day period.
US markets
US markets rallied on Friday, with the Dow climbing 0.5%, the S&P 500 gaining 0.7%, and the Nasdaq rising 0.9%.
The move augurs well for US consumers, who will get cheaper goods. Hopefully, it will help bring down inflation, which has been a concern of late. The core personal consumption expenditure (PCE) index, the preferred inflation gauge of the U.S. Federal Reserve, came in hotter than expected—both on a year-on-year and month-on-month basis—for December 2025. Core PCE rose 0.4% MoM and 3.0% YoY, the highest since November 2023 and well above the central bank’s 2% target.
In another economic data point, the first estimate of U.S. Q4 GDP growth came in at 1.4%, virtually half the expected 2.8% growth.
Looking at Indian markets
Back home, the Nifty is likely to open higher, buoyed by the weekend’s US developments. The Nifty had risen 100 points, or 0.39%, to 25,571 last week. The GIFT Nifty was up 320 points, or 1.24%, at 25,886. But that was when the duty was 10% on Friday. Now that the duty has been raised to 15%, the Nifty may not rise as much.
Technically, support is at 25,372. The first resistance is at 25,885, followed by 26,009 and then 26,341.
There has also been a positive change in FII derivative positions. The February series began with the long-to-short ratio of FII positions at 0.13, which has now improved to 0.34 levels—a four-month high. This is a telltale sign of major short-covering by FIIs. Considering that 75% of positions are still on the short side, any rise could send shorts scampering for cover. However, that could happen only if markets close higher than their opening levels on Monday.
Traders would do well to protect their profits with appropriate stop losses and keep an eye on the Chinese markets, which reopen on Tuesday after the Lunar New Year holidays.
(The author is a technical analyst, and former head of clients’ group, HDFC Securities)
Disclaimer: The views expressed are the author’s own and do not reflect the official policy or position of Financial Express.