Wall Street closed the week in the green after the U.S. Supreme Court ruled Trump's tariffs under IEEPA were illegal. All three major indexes finished with gains on Friday February 21, giving investors a breather after weeks of volatility.
How markets closed
- S&P 500: 6,909.51 (+0.69%) — 9 of 11 sectors positive
- Dow Jones: 49,625.97 (+230.81 points, +0.47%)
- Nasdaq Composite: 22,886.07 (+0.9%)
Top-performing sectors were Communication Services, Financials, and Consumer Discretionary. Only Energy finished in the red.
Why the market rallied
The main catalyst was the 6-3 Supreme Court ruling that the president "does not have authority under IEEPA to impose tariffs." This invalidated between $130 and $160 billion in tariff revenue, providing relief to companies facing higher costs.
However, the euphoria may be short-lived: Trump responded Saturday by announcing new 15% tariffs under Section 122, effective February 24.
The Magnificent 7 in trouble
Despite Friday's positive close, Big Tech stocks have accumulated significant losses in 2026:
- Microsoft: -18% year to date
- Tesla: -8%
- Amazon: -8%
Capital rotation from technology into defensive sectors and commodities is one of the most prominent trends of 2026.
How this affects you
If you hold investments in S&P 500 index funds or tech stocks, this year has been challenging. Volatility will remain elevated with tariffs as the dominant theme. Mixed economic data (weak GDP + high inflation) complicates investment decisions.
What to do with your portfolio
- Don't panic sell: the S&P 500 had a positive week despite the noise
- Diversify sectors: don't concentrate everything in tech; financials and consumer sectors are performing better
- Watch the tariffs: Section 122 has a 150-day limit and 5% legal maximum, which could limit the real impact
- Keep cash: with this volatility, having 10-20% in liquidity lets you take advantage of dips
