As discussed in my newsletters recently, this decision on
tariffs raises uncertainty (market risks)
ExecSpec
Comments 8/31
Our anticipated seasonal rally reached its projected peak on
August 29 as expected. The subsequent pullback (one day thus
far)—largely attributed to profit-taking following Nvidia’s
earnings release—came after the S&P 500 set yet another record
high. However, market risk has intensified with the Federal Appeals
Court’s decision upholding lower court rulings that most of
President Trump’s tariffs are unconstitutional. The critical
question now is whether investors accept Trump’s confidence in a
reversal from the conservative-leaning Supreme Court. Our outlook
is that the Supremes are also likely to rule against Trump’s
national emergency tariff authority before mid-October. This sets
the stage for either an immediate market correction or a potential
downturn once the SCOTUS decision is issued over the next 6 weeks.
While Trump does have a viable—though more complex—path to
reinstating tariffs, after some initial hurdles we
anticipate he will ultimately succeed. To navigate this
uncertainty, portfolio cash holdings have risen to 29% alongside a
slight tilt toward defensive positions, a posture we might maintain
until bearish seasonal trends subside and the Supreme Court
delivers its ruling. As it stands, the expected correction in the
S&P 500 through early October appears contained in the 4–8%
range. On a positive note, small-cap and value stocks are currently
outperforming AI-related and mega-cap equities.
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Tariffs Court Ruling
Posted by steve on 30th of Aug 2025 at 08:05 am
Tariff News
As discussed in my newsletters recently, this decision on tariffs raises uncertainty (market risks)
ExecSpec Comments 8/31
Our anticipated seasonal rally reached its projected peak on August 29 as expected. The subsequent pullback (one day thus far)—largely attributed to profit-taking following Nvidia’s earnings release—came after the S&P 500 set yet another record high. However, market risk has intensified with the Federal Appeals Court’s decision upholding lower court rulings that most of President Trump’s tariffs are unconstitutional. The critical question now is whether investors accept Trump’s confidence in a reversal from the conservative-leaning Supreme Court. Our outlook is that the Supremes are also likely to rule against Trump’s national emergency tariff authority before mid-October. This sets the stage for either an immediate market correction or a potential downturn once the SCOTUS decision is issued over the next 6 weeks. While Trump does have a viable—though more complex—path to reinstating tariffs, after some initial hurdles we anticipate he will ultimately succeed. To navigate this uncertainty, portfolio cash holdings have risen to 29% alongside a slight tilt toward defensive positions, a posture we might maintain until bearish seasonal trends subside and the Supreme Court delivers its ruling. As it stands, the expected correction in the S&P 500 through early October appears contained in the 4–8% range. On a positive note, small-cap and value stocks are currently outperforming AI-related and mega-cap equities.