The recent U.S. Supreme Court ruling striking down President Donald Trump’s broad tariff measures has reshaped the global trade landscape, bringing both clarity and fresh uncertainty. The U.S. Supreme Court ruled that the International Emergency Economic Powers Act (IEEPA) does not give authority to the president to impose sweeping import tariffs, effectively blocking one of Trump’s key trade tools.

However, within a day of the verdict, Trump signalled that he would continue pursuing new tariffs. He invoked a temporary global tariff—first 10%, then raised to 15%, the maximum allowed under the US trade law.

Global response

The Supreme Court’s decision to strike down Trump’s earlier tariff framework prompted varied global reactions. The European Commission immediately rejected any increase in tariffs and said that existing agreements must be honoured. India postponed a planned trade visit to Washington to reassess the implications of the ruling, reflecting broader uncertainty among U.S. trading partners. This shifting tariff landscape may create instability in global trade flows, as businesses and governments reassess supply chains and tariff exposures. Existing trade deals face renewed strain: some partners may reconsider agreements struck at higher tariff rates, while others may challenge the legality or longevity of the new levies.

Impact on the US dollar

The U.S. dollar showed a mixed response following the Supreme Court’s ruling against Trump’s earlier tariffs. It initially rose, reflecting a brief boost in confidence, but later fell, as investors reassessed the ruling’s implications and shifted toward safe-haven assets like gold and silver. Trump’s swift introduction of a 15% global tariff added fresh uncertainty, further pressuring the dollar as markets priced in potential trade disruptions and weaker economic sentiment.

Renewed interest in bullion

Gold and silver surged following the U.S. Supreme Court’s decision, as investors sought safe-haven assets amid sudden policy uncertainty. Gold futures jumped past $5,200, while silver rose nearly 9% on the day of the ruling. When Trump quickly responded with a new 15% global tariff, safe-haven demand strengthened further, supported by a weaker dollar and renewed trade concerns. Overall, both metals gained sharply as uncertainty over U.S. trade policy drove investors toward bullion.
Against this backdrop, bullion is likely to remain supported in the coming days. Periods of policy instability and fluctuating trade frameworks often weaken sentiment toward the U.S. dollar, prompting investors to shift towards assets perceived as more stable.

Impact on energy commodities

For energy commodities, the impact is likely to be felt through two key channels: currency volatility and trade-flow uncertainty. Any pressure on the U.S. dollar—caused by legal ambiguity, shifting tariff frameworks, or perceived political risk—tends to influence crude oil prices, since oil is globally priced in dollars. A weaker dollar typically supports higher energy prices, while a stronger one may exert downward pressure.

However, the shifting tariff landscape could indirectly influence global purchasing behaviour. If tariff related uncertainty disrupts trade flows or prompts buyers to diversify away from higher-tariff sources, Russian exporters may see changes in market dynamics. In this backdrop, countries like India—already a major buyer of discounted Russian crude, could further lean towards Russian supplies as a cost-effective alternative, especially if U.S. tariff actions make other import routes more expensive or less predictable.

Renewed volatility in base metals

For base metals such as copper and aluminium, the near-term outlook is likely to be shaped by dynamics like policy instability, currency fluctuations, and shifting supply-chain expectations. Copper, closely tied to global manufacturing and investment sentiment, tends to react sharply to uncertainty in trade policy. If tariff-driven instability pressures the U.S. dollar or clouds the outlook for industrial demand, copper may experience renewed volatility as markets reassess consumption prospects.

Aluminium, meanwhile, remains highly sensitive to trade flows and cost structures. Any tariff-related disruption to cross-border metal movement, or shifts in demand from sectors like autos and construction, could temper price gains and keep volatility elevated. Overall, with tariff pathways still unsettled and markets awaiting clarity, base metals are poised for cautious, choppy trading in the days ahead.

This shifting trade landscape has already generated “huge uncertainty” for companies and U.S. trading partners, heightening concerns over rising costs, supply-chain realignments, and the resilience of existing trade agreements. Ultimately, the Supreme Court ruling has not concluded the debate over U.S. tariff policy; it has opened a new and unpredictable chapter. With the administration pursuing alternative legal pathways, such as the newly imposed 15% global tariff, the long-term direction of U.S. trade strategy remains unclear. Until greater clarity emerges, commodity markets are likely to remain on uneven footing, shaped by caution, exchange-rate fluctuations, and evolving global policy risks.

(The author Hareesh V is Head of Commodity Research, Geojit Investments)

(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)

As earnings momentum stabilises and valuation froth normalises, the risk-reward equation in the broader markets is turning more constructive. Trupti Agrawal of WhiteOak Capital believes the recent correction has created a wider opportunity set in small- and mid-cap stocks, where improving fundamentals, relative earnings resilience, and market inefficiencies are beginning to offer selective alpha potential.

Edited excerpts from a chat with the senior fund manager:

The market has been stuck in a consolidation phase for the last 1.5 years. Now that earnings downgrades have slowed and US trade deal uncertainty is gone, what is holding the market back?

Over the past few weeks, India has secured a trade agreement with two of its largest trading partners, ie EU and US, which have a combined share of ~37% in India’s total goods exports. Overall, it is anticipated that the trade deals would be particularly beneficial in expanding market access and improving export competitiveness for India.

Secondly, incoming data indicates that the growth momentum seen in 3QFY26 has sustained into 4Q as well. Overall, the growth outlook remains constructive, with the RBI raising the FY2026 GDP forecast to 7.4% and the Economic Survey projecting 7.4% in FY2026 and 6.8–7.2% in FY2027, supported by domestic demand and ongoing reforms.

While we do not take top-down views on the market, the recent correction means that, on a relative basis, Indian equity markets are trading at or close to 10 year averages while the relative premium to EMs have narrowed to 45%, below the long term historical range, and far off its highs of 90% observed between 2022-2024. Over the past five years, India has recorded the highest annualised earnings growth among peers at ~10%, and is expected to sustain a healthy 14–15% growth trajectory going forward, although admittedly it is not significantly ahead of other major EMs over the next couple of years.
Although the macro implications of technological evolution remain uncertain, India’s diversified sectoral composition and relatively lower market volatility support a more stable and resilient earnings cycle.

Consumption was touted as a big theme after GST cuts were introduced before Diwali. Since then auto appears to be the only winner in the consumption cycle. Are you disappointed with the impact that GST is having on overall consumption in India?

Consumer-facing sectors saw a sequential improvement in earnings this quarter, although the recovery remains somewhat mixed across categories. In autos, revenue growth was supported by festive demand and GST rationalization, along with recovery in CVs. Consumer staples delivered sequentially a decent set of numbers, led by rural growth. Premiumization trends continue to stay strong and emerging channels such as e-commerce and quick commerce are continuing to scale well. Jewelry companies reported stellar performance at the back of rising gold prices which is a both headwind and tailwind at the same time for the category, coupled with the sustained trend of formalization of the sector in India. There is a view among the relatively smaller ticket discretionary lifestyle consumption category companies that the customers appear to have prioritized purchase of bigger ticket products with higher GST reduction benefits initially, which should change in the coming times aiding demand for their products.

Media and retail sector trends have been largely company- and event-driven with seasonality playing a role in some companies. More importantly, the earnings revision cycle remains uneven — autos are seeing early signs of estimated upgrades, but upward revisions across other consumer segments have been relatively muted.

Smaller sized private and PSU banks have reported a double-digit gold loan mix. Is this a healthy trend for their balance sheets?

Gold loans are regarded as among the lower risk retail products as (1) they are collateralized, (2) recovery is relatively quicker via auction and (3) borrower behavior tends to be disciplined and guided by emotional and sentimental value attached to their pledged items. Recent asset quality trends with CRIF data showing PAR >90 days below 1% across the system is far better than unsecured retail or MFI loans.

That said, we believe that any outsized exposure to a single segment increases lender risk, particularly if collateral values are affected during periods of volatility, as can occur with precious metals. While most private and PSU banks have robust risk management frameworks in place to mitigate such risks through prudent LTVs and monitoring mechanisms, concentration risk remains an important consideration.

As with any product, gold loans can be attractive from a margin standpoint, provided exposures remain well-calibrated and contained within a diversified portfolio framework.

Credit growth in many PSU banks has been higher than their private peers in Q3. Are PSU bank stocks looking more attractive? Are valuations good enough to buy?

Yes, recent asset quality trends and growth at large PSU banks have been comparable to those of large private sector peers. However, with any sub-segment, rather than taking a top-down view, we prefer to identify bottom-up opportunities.

Historically, the valuation gap between PSU and private banks has reflected differences in RoAs, as well as governance and capital allocation constraints. Also, it should not be missed that over time well-run private sector banks have gained market share when compared to PSU banks.

On an aggregate basis, the banking sector offers opportunities across the market-cap spectrum, and valuations do not appear stretched, with earnings expectations in the mid-teens.

Which sectors appear structurally well-positioned over the next three to five years, and why?

We are very stock selection driven as a house and do not make top down thematic or sectoral calls, as those are fraught with risk without adding returns in our view. Our sectoral over weights and underweights are an outcome of bottom-up stock picking opportunities at any given point in time, rather than an input to our portfolio construction. For the all-cap portfolio, from a bottom-up perspective, there are certain sectors where we consistently find more opportunities. Currently we see more promising prospects within private sector financials, consumer discretionary, communication services, healthcare, REITs and Invits. While not generalising, it is certain sub-segments and individual companies within them that find favour with the team.

Do you think that the sell-off in small caps we saw in last 1.5 years is done and that we will see gradual recovery in next 2 quarters?

Since its peak in Sep 2024, small caps have corrected meaningfully due to a combination of tighter liquidity, higher interest rates, and earnings downgrades. Much of this adjustment appears to have already played out and recent earnings trends within the small and mid-caps have been ahead of large caps. Having said that, a broad-based recovery in share prices usually requires sustained improvement in earnings momentum, cash flows, and risk appetite, which tends to lag market corrections, especially after prolonged periods of adjustment.

Historically, we find greater number of opportunities in the mid and small market cap and off-benchmark companies. We believe these segments of the market are typically less well researched and hence more inefficient, thereby providing strong alpha generation potential.

Although we tend to be bottom up focussed, looking ahead over the next couple of quarters, a gradual and selective recovery is a reasonable base case rather than a sharp rebound.

What stood out for you in the Q3 earnings season? Are you more hopeful of broad-based growth than before?

Earnings growth in Q3 has been stronger than recent quarters, with aggregate Nifty-500 Index earnings at 14%, with SMIDs outpacing large cap earnings. We note healthy earnings growth delivered by autos, capital goods and utilities, while consumption was gradual but uneven.

However, we would like to see a few more quarters of consistent earnings trends before gaining greater confidence in a sustained recovery in the earnings trajectory.

Nvidia NVDA -4.16%decrease; red down pointing triangle now makes more revenue in a single quarter than most other chip companies generate in an entire year. In a turbulent market awash in a new class of AI fears, that’s no longer enough. 

The chip maker’s fiscal fourth-quarter results Wednesday showed why the company remains the undisputed leader in artificial-intelligence computing. Revenue of $68.1 billion was up 73% from the same period a year earlier and represented the company’s best growth rate in four quarters. Nvidia projected an even higher growth rate for the current quarter, and that forecast actually beat Wall Street’s consensus target by the widest range in two years, according to FactSet data.

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