Invesco: The U.S. Supreme Court overturning tariff policies is within market expectations, but the overall U.S. tariff level is unlikely to decrease significantly.

According to the Ji Tong Finance APP, Brian Levitt, Chief Global Market Strategist at Invesco, stated that the U.S. Supreme Court’s decision to overturn the U.S. tariff policy was largely in line with market expectations. The market has generally believed that the likelihood of maintaining IEEPA tariffs was low, especially after the Supreme Court expressed doubts about their legality during oral arguments last November. He added that although the court overturned the IEEPA tariffs, the overall level of U.S. tariffs is unlikely to decrease significantly. Other regulations grant the president broad authority to impose tariffs, which means that tariffs previously implemented under IEEPA could be reimposed under different legal frameworks. Therefore, the initial market reaction to this ruling may ultimately be quite brief.

He mentioned that although the ruling has largely been reflected in financial markets, the initial response remains consistent with expectations: U.S. small caps rose, non-U.S. stock markets strengthened, the U.S. Treasury yield curve steepened, and the dollar weakened. Since the market had already widely anticipated this outcome, these early movements are more like real-time reactions to headline news rather than signals of a major change in the global economic fundamentals.

He pointed out that given there are still multiple options to maintain tariffs, the level of U.S. tariffs appears likely to persist, even if their legal basis may change. Fortunately, the global economy and financial markets have proven capable of withstanding U.S. tariff levels at multi-decade highs.

Invesco remains optimistic about the outlook for 2026. Several tailwinds are converging, including global fiscal and monetary stimulus measures and AI-driven investments expected to boost productivity and economic growth. Overall, household and corporate leverage levels are not high.

Therefore, the current environment remains favorable for risk assets, especially in areas with attractive valuations such as non-U.S. stocks, small caps, and U.S. cyclical sectors. The ruling has little impact on their investment views. From an investment perspective, although macro and market outlooks remain positive, market volatility may increase as events unfold.