Stock futures are trading relatively flat Thursday evening as investors brace for a flurry of key economic data and a highly anticipated Supreme Court ruling on President Trump's tariffs. While the market seems cautious ahead of these major events, the bigger picture suggests Wall Street is gearing up for some potentially significant moves in the days ahead.
Economic Data in Focus
On the data front, traders will be closely watching the release of the Q4 GDP report on Friday morning. Economists polled by Reuters expect the economy grew at a 2.5% annualized pace in the final quarter of 2025, slowing from the robust 4.4% gain seen in Q3. This will provide crucial insights into the health of the U.S. economy as the Federal Reserve continues its campaign of interest rate hikes.
Investors will also be scrutinizing the latest personal consumption expenditures (PCE) price index, the Fed's preferred inflation gauge. After a hotter-than-expected CPI report earlier this month, any upside surprise in the PCE data could stoke fears of further monetary tightening.
Supreme Court Tariff Ruling Looms
Meanwhile, the Supreme Court is widely expected to hand down its ruling on the legality of President Trump's tariffs as soon as this Friday. As CNBC recently reported, the outcome could have significant implications for consumer-facing companies that have felt the pinch of the trade war.
What this really means is that the market is bracing for potentially volatile swings, depending on whether the high court upholds or strikes down the tariffs. A decision to overturn the tariffs could provide a short-term boost to stocks, while an affirmation would likely lead to a selloff, especially in sectors like retail that have struggled with the higher costs.
Bigger Picture Remains Uncertain
Looking at the bigger picture, the road ahead for the markets remains uncertain. While the economy has shown resilience in the face of the Fed's rate hikes, recent analysis suggests the central bank may need to tighten policy further to tame inflation. And with the potential for further trade policy disruptions, investors will need to stay on their toes in the coming weeks and months.
As the President touts his economic agenda and the 2026 election season heats up, the markets will undoubtedly continue to be buffeted by a range of political and economic crosswinds. Savvy investors would be wise to keep a close eye on the data, policy developments, and broader market trends to navigate the road ahead.