Markets likely to look past US Supreme Court ruling on Trump tariffs, says Neeraj Seth

Global markets are unlikely to see a sustained reaction to the US Supreme Court’s ruling on the US President Donald Trump’s emergency tariffs, though short-term volatility cannot be ruled out, according to Neeraj Seth, Founder and CIO of 3R Investment Management.Markets are watching the court’s decision on whether the tariffs will face a partial strike down, a full strike down, or no change. Investors are also assessing how quickly alternative tariffs could be imposed if the ruling goes against the administration. Also, even if the Supreme Court strikes down the tariffs, the administration has legal options to reintroduce them.

Also Read | Venezuela oil tensions may settle, but investors should watch Iran risk: BCA Research

From an India perspective, Seth expects a short-term reaction, with factors such as tax cuts, expected earnings recovery, reduced tariff uncertainty, and signs of rupee stabilisation supporting the market. However, trade-related uncertainty linked to global deals still needs to ease.Also Read | Goldman Sachs sees strong FMCG recovery, but stays cautious on discretionary demand

While global fiscal and monetary conditions remain supportive, Seth expects geopolitical risks to lead to higher volatility next year. This may not necessarily change the overall market direction but could increase swings in asset prices in 2026.On the impact of a tariff strike down on US assets, Seth said reactions will differ by asset class. He noted that US Treasury markets could come under pressure as tariff revenues have been factored into fiscal calculations.

“It’s negative for the Treasury markets,” Seth said, pointing to the US fiscal deficit, which is running close to $2 trillion. Equities, he added, are likely to show mixed sector-wise reactions.

Seth said equities could face near-term pressure, especially if long-term yields rise. “The immediate reaction in equities might be negative,” he said, adding that interest-rate-sensitive sectors could see a larger impact.

For the full interview, watch the accompanying video

Catch all the latest updates from the stock market here