Institutional investors are increasingly looking for regulated access to digital assets as banks modify their services to satisfy this demand. On September 3, U.S. Bank announced that it has restarted its cryptocurrency custody services, which were first launched in 2021, through an early access program for clients of Global Fund Services. The bank elaborated:
These services are designed for institutional investment managers with registered or private funds who are in search of a secure solution for the safekeeping of bitcoin.
The revamped platform also offers support for bitcoin exchange-traded funds (ETFs), with NYDIG, a firm specializing in bitcoin financial services and infrastructure, chosen as the sub-custodian.
Executives framed the relaunch as a continuation of previous efforts and a reaction to changing regulations. Stephen Philipson, vice chair of U.S. Bank Wealth, Corporate, Commercial and Institutional Banking, remarked: “We take pride in being one of the first banks to provide cryptocurrency custody for fund and institutional custody clients back in 2021, and we are thrilled to bring this service back this year. With increased regulatory clarity, we have broadened our offerings to include bitcoin ETFs, enabling us to deliver comprehensive solutions for managers in need of custody and administration services.
NYDIG’s CEO Tejas Shah expressed, "We are privileged to collaborate with U.S. Bank as its main provider for bitcoin custody services. This partnership allows us to connect traditional finance with the contemporary economy, enabling Global Fund Services clients to access bitcoin as a reliable form of currency, all while ensuring the safety and security that regulated financial institutions demand."
Additionally, broader strategic goals were emphasized. Dominic Venturo, senior executive vice president and chief digital officer at U.S. Bank, stated, "U.S. Bank has been leading the way in investigating how digital assets can benefit our clients. By further enhancing our capabilities, we open up new avenues to provide innovative solutions to those we serve. U.S. Bank is committed to advancing progress and shaping the future of what is important for our clients in the realm of digital finance." With $11.7 trillion in assets under custody and administration as of June 30, 2025, the bank’s re-entry into bitcoin custody indicates a growing institutional willingness to engage with cryptocurrencies. Although critics point out the risks associated with market volatility and custodial complexities, supporters argue that regulated partnerships enhance security and expand access for institutional investors looking to invest in this asset class.
Technology stocks have reclaimed their leading position. The Nasdaq Composite experienced significant gains during Wednesday's trading session, driven by rising shares of Alphabet and Apple.
Alphabet's stock surged by 9.1% after Google successfully evaded severe antitrust penalties. A U.S. judge permitted the company to retain both its Chrome browser and its collaboration with Apple. Meanwhile, Bitcoin and gold also saw increases.
Even with the gains on Wednesday, investors are preparing for potential volatility in September, a month that has historically been unfavorable for stock market performance. Both stocks and bonds faced declines on Tuesday as investors expressed concerns over inflation and the independence of the Federal Reserve.
"Given September's poor historical performance, the defensive sectors have proven to be the most resilient," remarked Sam Stovall, chief investment strategist at CFRA Research.
Commenting on the market fluctuations this week, he noted, "We’ve observed at least one instance of a one-day turnaround in that rotation."
Shares of U.S. oil producers negatively impacted the S&P 500, plummeting sharply on Wednesday amid speculation that the Organization of the Petroleum Exporting Countries and its allies might opt to increase output, potentially worsening a global fuel surplus when the cartel convenes this weekend.
The 30-year Treasury yield retreated after briefly exceeding 5% early Wednesday, while the 10-year Treasury also saw a rally. These changes followed a government report indicating an increase in private layoffs compared to the previous year, along with a speech from a Federal Reserve official that highlighted "downside risks to the labor market."
In Europe, yields on longer-term debt stabilized after reaching their highest levels in over a decade on Tuesday. Japan, however, lagged behind, with bond prices remaining under pressure, resulting in higher yields.
Treasury Secretary Scott Bessent is set to begin interviewing candidates for the next chair of the Federal Reserve starting this Friday, as reported by sources familiar with the situation.
Macy's stock experienced a significant increase of 21% following the department store's upward revision of its annual forecast. Nevertheless, the company anticipates that consumers will be more selective due to tariffs and various economic challenges in the latter half of the year.
In the previous quarter, earnings per share for S&P 500 companies increased by approximately 13% compared to the same period last year, based on LSEG data that includes projections for companies that have yet to report.
During trading on Wednesday:
The stock market showed mixed results. The Dow industrials remained relatively stable, while the S&P 500 gained 0.5%. The Nasdaq Composite outperformed, climbing by 1%.
The yield on the 10-year Treasury note decreased to 4.211%, and the 30-year bond yield stood at 4.892%.
The WSJ Dollar Index experienced a slight decline.
Gold prices continued to rise. Gold futures for September delivery increased by 1.2%, closing at a record high of $3,593.20 per troy ounce.
Japanese and most Asian stock markets saw declines, whereas European markets experienced gains.
Oil prices fell following a media report indicating that OPEC+ might consider increasing output again after their meeting on Sunday.
Ripple's announcement—made in July via social media by CEO Brad Garlinghouse—reflects similar actions taken by Circle and BitGo. Analysts believe that the joint effort to obtain a national charter is focused on enhancing credibility and integrating more deeply into Main Street.
However, are these initiatives merely superficial enhancements? While national trust banks hold federal charters, they are not permitted to accept deposits or issue loans like traditional banks. Instead, their role is to safeguard assets, manage client funds, and provide relevant financial products, indicating that this strategy is primarily about vertical integration and minimizing dependence on third parties. Still, these changes act as a significant alert for the conventional banking industry. With a charter, digital asset companies could enjoy quicker settlement times and reduced costs, bypassing intermediary banks.
For some, the advance of blockchain-based digital companies should be viewed as a complementary force. "Entities driven by blockchain are no longer mere disruptors on the outskirts; they are now recognized custodians of value that can coexist with and enhance traditional banking systems," states Tim Chen, global strategy head at Mantle, a blockchain financial technology company. Nevertheless, Chen cautions that traditional banks must recognize that tokenization is swiftly altering the landscape.
"What used to necessitate intermediaries and protracted settlement processes can now be accomplished through a smart contract and a stable, regulated digital token," he adds.
The charter applications must receive approval from the Office of the Comptroller of the Currency, which is the highest banking regulator in the US. Ripple is also pursuing a Fed Master account that would grant access to the Federal Reserve’s payment system. If this request is approved, Ripple would be able to maintain reserves of RLUSD, its own stablecoin, with the central bank. Circle has submitted a similar request. Earlier this July, Bluechip, the agency that rates stablecoins, awarded RLUSD its highest rating.
President Trump’s supportive stance on cryptocurrency has encouraged the bold initiatives taken by crypto companies. In July, the administration enacted the GENIUS Act, which governs stablecoins. Additionally, two more crypto-related laws, the Clarity Act and the Anti-CBDC Surveillance State Act, are still awaiting approval.
0504 GMT – According to Luca Bindelli, the head of investment strategy at Lombard Odier, the U.S. dollar is expected to weaken further against both major and emerging market currencies. He notes in a research report that previously extended short positions on the dollar have now normalized. The chances of the Federal Reserve reducing rates, while other major central banks (excluding the Bank of England) maintain stable policy rates, will lessen the yield advantage of the U.S. dollar against both major and emerging currencies. Additionally, anticipated economic resilience and equity outperformance in emerging markets may lead to increased investments in EM assets, thereby bolstering EM currencies, Bindelli adds. Lombard Odier forecasts the EUR/USD exchange rate to reach 1.22 in a year, while it currently stands at 1.17. (monica.gupta@wsj.com)
Dollar Likely to Consolidate, Not Collapse
0258 GMT — Vishnu Varathan, head of macro research for Asia ex-Japan at Mizuho Securities, states that the dollar is more likely to consolidate rather than collapse, as the markets have already factored in potential U.S. rate cuts. He mentions that upcoming U.S. data and the Fed's decision in September may only serve to “temper not tear down” the dollar. The threshold for a weak [nonfarm payrolls] figure or other U.S. data to negatively impact the USD is quite high. Furthermore, he points out that U.S. trade policies that redirect trade and capital flows from trading partners will likely delay, and possibly temporarily overwhelm, the pressures to 'Sell America.' The U.S. dollar index has risen by 0.1% to 97.83. (hoishan.chan@wsj.com)
The Trump family gained as much as $6 billion in paper wealth on Monday following the trading launch of a new digital currency from their flagship crypto venture.
This launch resembles an initial public offering, allowing the cryptocurrency named WLFI to be traded on the open market just like shares of a publicly listed company. Prior to this, individuals who had privately purchased WLFI from the Trump venture, World Liberty Financial, were unable to exchange their tokens.
This trading debut is likely the most significant financial achievement for the president’s family since he took office. The Trump family, including President Trump, owns nearly a quarter of all WLFI tokens available. Trump’s three sons are co-founders of World Liberty, and the president is recognized as a “Co-Founder Emeritus.”
World Liberty indicates that the tokens held by founders and team members are still “locked,” meaning they cannot sell them yet. However, the launch of trading now establishes a real-world valuation for their holdings, which were previously assessed based on private transactions.
WLFI is probably now the most valuable asset for the Trumps, surpassing their long-standing property portfolio. While the president’s family has continued to engage in property deals globally since taking office, the rapidly evolving crypto sector has had the most significant early influence.
President Trump was instrumental in launching World Liberty a year ago during his campaign, stating it would contribute to making “America Great Again, this time with crypto.”
World Liberty has experienced significant growth this year, largely due to the president's efforts to advance the crypto industry from the White House, where he has been implementing regulations and promoting the potential of private digital currencies to boost the U.S. economy.
Ahead of the WLFI trading launch, World Liberty acquired a publicly traded company this summer and secured $750 million in funding from investors to purchase the cryptocurrency.
This transaction, which is notably circular with the same entity acting as both buyer and seller, is expected to generate approximately $500 million for the Trumps, as they retain up to 75% of the revenue from the token sales, as reported by The Wall Street Journal.
WLFI trading surged on crypto exchanges early Monday, with around $1 billion worth of tokens exchanged within just an hour, according to CoinMarketCap.
On Binance, the leading exchange, WLFI was trading between 24 cents and 30 cents per token, consistent with the prices suggested by futures contracts linked to the cryptocurrency that were traded there the previous week. At the higher end of that range, the Trumps' investment is valued at over $6 billion.
When factoring in their interests in other crypto ventures, the Trump family's total crypto assets are even more substantial. Entities associated with Trump hold approximately 80% of $Trump, a so-called memecoin valued at several billion dollars.
A trust owned by Trump possesses just over half of the publicly traded Trump Media, which operates his Truth Social platform and invests in cryptocurrencies. This stake is estimated to be worth around $2.5 billion.
Cashing in on this newly generated wealth may indeed be challenging, as even minor sales of cryptocurrencies can lead to a decline in prices.
The current price of WLFI on Monday represents a significant premium over the 1.5 cents that investors initially paid last year to acquire the token from World Liberty, providing them with a chance to realize substantial profits. World Liberty indicated that those early investors would initially be allowed to trade only 20% of their holdings.
Cryptocurrencies are known for their extreme volatility, which means the actual value of the Trump fortune could vary dramatically. The $Trump memecoin, which was launched in January, experienced an initial surge before experiencing a sharp decline.
Critics of World Liberty argue that it could serve as a means to sway the Trump family and that its expansion is fueled by partners and investors looking for assistance from the White House. For example, the market for a dollar-pegged stablecoin called USD1, issued by World Liberty, has been significantly supported by Binance, whose founder, facing conviction, has been pursuing a presidential pardon, as previously reported by the Journal.
White House press secretary Karoline Leavitt stated, "neither the president nor his family have ever engaged, or will ever engage, in conflicts of interest."
Zach Witkoff, the CEO of World Liberty and son of presidential envoy Steve Witkoff, mentioned last week that the company operates strictly as a private entity and does not involve itself in politics, although he added, "clearly President Trump is the greatest president of all time."
World Liberty has asserted that the long-term value of its cryptocurrency will be bolstered by its ambitions to become a significant player in the industry. Alongside the issuance of USD1, the initiative plans to launch a mobile application. "This isn’t just a meme coin," tweeted Donald Trump Jr. shortly after the launch.
Tad Tobar, the chief operating officer of the cryptocurrency company Lorenzo Protocol, which has partnered with World Liberty, stated his intention to purchase and retain WLFI. This token provides its holders with voting rights on certain operations of World Liberty, referred to as governance rights, but it does not entitle them to any share of the profits.
"Its durability is genuine because it is intended to serve as the governance token for this emerging open economy," Tobar remarked.
As Democrats express concern over their reduced influence and attempt to rein in President Trump, a former senator from the party is discovering profitable ventures in Republican-led Washington.
Since her departure from Congress in January, Kyrsten Sinema has initiated a variety of projects and new roles centered around cryptocurrency, artificial intelligence, and psychedelic research.
She heads an organization that promotes Arizona businesses. Additionally, she is part of the Coinbase Global Advisory Council, is employed at a lobbying and law firm, and continues to teach at Arizona State University. Sinema chairs an association for companies involved in AI and claims that the group has significantly influenced certain executive orders in that field.
“I collaborated effectively with the Trump administration during Trump 1.0. I’m collaborating effectively with the Trump administration in Trump 2.0,” the former Arizona senator stated in an interview. “That’s always been my approach.”
While her earnings have not been made public, sources familiar with her endeavors estimate that she is on track to earn well over a million dollars this year. Her aide chose not to comment on the amount.
It is not uncommon for former lawmakers to profit after leaving Congress. However, the sheer volume of Sinema’s projects is remarkable—and so are her connections with a party she never officially joined.
She completed a single tumultuous term in the Senate as a Democrat and later as an independent, negotiating on infrastructure and gun control while thwarting the Democrats’ attempts to increase tax rates on corporations, private-equity managers, and high-income households. She played a crucial role in supporting the Democrats’ significant fiscal legislation in 2021 and 2022 while the party held the majority.
However, she frustrated her colleagues by obstructing the Democrats’ efforts to abolish the 60-vote filibuster threshold in the Senate, which restricted the party’s capacity to advance immigration and election reforms. She did this while disregarding traditional Senate norms, occasionally donning neon wigs, sequins, and thigh-high boots.
Sinema was a puzzling figure in Washington, with progressives initially hailing her election as Arizona’s first female senator and the first Democrat to represent the state in decades. Yet, many within the party quickly became disillusioned with her centrist, pro-business stance. In 2022, she departed from the Democratic Party and chose not to run for re-election in 2024 as her chances of winning diminished.
Since leaving her position, the 49-year-old has rebranded herself as a Republican insider, engaging with White House officials and assisting clients in navigating Capitol Hill.
While persuading major Arizona companies to contribute $250,000 each for the inaugural year of membership in the Arizona Business Roundtable that she leads, Sinema emphasized her connections in Washington, including her relationships with Vice President JD Vance and Senate Majority Leader John Thune (R., S.D.). She informed The Wall Street Journal that she has a personal rapport with most members of Trump’s cabinet.
The S&P 500’s journey to a record high this year has not been inexpensive: By various metrics, stocks have reached unprecedented price levels.
Investors are currently paying more than ever for every dollar of revenue generated by the companies within the index. On Thursday, the benchmark was trading at 3.23 times sales, marking a record high.
While price-to-earnings ratios are not at all-time highs—thanks to substantial profit margins at many of the index’s top companies—they remain at the extreme end of historical values. The S&P 500 is presently trading at 22.5 times its anticipated earnings for the next 12 months, in contrast to the average of 16.8 times since the year 2000.
Many investors believe that the largest U.S. stocks, predominantly technology firms, are worth every cent. Companies such as Nvidia and Microsoft continue to drive sales and profits at an impressive rate, solidifying their market dominance. By the end of July, the 10 largest firms in the S&P 500 represented 39.5% of its total value, the highest ever recorded, as reported by Morningstar. Nine of these companies boast a market capitalization exceeding $1 trillion.
"I’m not particularly concerned about that by itself," stated Steve Sosnick, chief strategist at Interactive Brokers. "The real question is what could occur if the circumstances shift."
In April, investors witnessed the risks associated with the market's reliance on a few high-priced stocks when President Trump’s tariff proposals led to a short-lived selloff. The so-called Magnificent Seven tech stocks underperformed compared to the overall S&P 500, which itself lagged behind if each of the 500 stocks was weighted equally.
"The mix of extremely high valuations and heavily crowded trades certainly increases the market's vulnerability to a prolonged downturn," Sosnick noted. "If everyone is essentially invested in the same assets, where will the new buyers come from when prices drop?"
A private measure of China's manufacturing sector surged back into growth in August, reaching a five-month peak, although doubts persist about the sustainability of this rebound.
The RatingDog China general manufacturing purchasing managers index increased to 50.5 last month from 49.5 in July, as reported by S&P Global on Monday. A score above 50 indicates growth in activity, while a score below that signifies a decline.
The renewed growth in China's manufacturing sector in August was bolstered by a rise in new orders, driven by better domestic demand and effective promotional strategies, according to the surveyed panelists. Manufacturers expressed their highest level of optimism since March, fueled by hopes for improved economic conditions and the belief that their expansion strategies will enhance sales over the coming year, as per RatingDog and S&P Global.
However, manufacturers remained cautious regarding hiring, choosing to reduce staff for the fifth consecutive month in August, despite increased capacity pressures and growing business confidence, they observed.
The recovery in Chinese manufacturing activity is still uneven, according to RatingDog founder Yao Yu.
"The sustainability of this improvement hinges on whether exports genuinely stabilize and if domestic demand can accelerate," Yao stated.
Yao observed that the rate of decline in new export orders has slowed down. "This is a positive sign, but we must remain cautious, as external demand appears to be somewhat advanced while domestic demand remains weak, which may limit the potential for increased output unless domestic demand strengthens," he remarked.
Yao further stated, "The recent increase feels more like a moment of relief than a lasting surge."
The reading from Monday contrasts with another official measure released on Sunday, which indicated a decline in factory activity for the previous month. The official manufacturing PMI for August was reported at 49.4, slightly up from July's 49.3.
The RatingDog survey, conducted by S&P Global, places greater emphasis on smaller private enterprises in China and has frequently shown different trends compared to the official measure.
Looking forward, Zichun Huang from Capital Economics mentioned in a note on Monday that she anticipates continued slow fiscal spending to impact infrastructure activities negatively. "The government's initiatives to address overcapacity might suppress manufacturing output by limiting excess production," Huang noted.
In a recent indication of pressure within the Chinese economy, new home sales transactions from the 100 largest property firms in China reached 207 billion yuan, or $29.03 billion, in August, as reported by China Real Estate Information Corp. This represents a 17.6% decrease compared to the same month last year and marks the sixth consecutive month of decline.
As economists expressed their concerns in August regarding President Trump’s increasing pressure on the Federal Reserve, the markets conveyed a contrasting sentiment: Let the good times roll.
A Friday selloff in shares linked to artificial intelligence before traders departed for the Labor Day weekend didn’t hinder the monthly rise of stocks. Achieving five out of its 20 records this year in August, the S&P 500 climbed 1.9% for the month, while the tech-focused Nasdaq composite rose by 1.6%. The Dow Jones Industrial Average increased by 3.2%.
All of these indices were surpassed by the Russell 2000, where small- and midsize companies, which have suffered the most from rising interest rates, suddenly appear more attractive to Wall Street.
Deteriorating economic data and the currently limited price effects from tariffs have instilled greater confidence in investors that the Fed will lower rates at its upcoming meeting next month. Concurrently, Trump’s initiative to fill the central bank with officials who support lower rates—highlighted this week by an attempt to dismiss Fed governor Lisa Cook—has contributed to the optimism that further rate cuts may be forthcoming.
Economists caution that a central bank more influenced by the White House is at a greater risk of excessively lowering rates, which could eventually lead to increased inflation. If August serves as any indication, the stock market perceives that risk as a concern for another day.
Robert Barbera, the director of the Johns Hopkins University Center for Financial Economics, noted that the recent tranquility among investors regarding Fed independence suggests a reversal of the saying popularized by former Fed Chair William McChesney Martin Jr. The Fed's role is to remove the punch bowl just as the festivities are reaching their peak.
Barbera humorously remarked that "Trump aims to eliminate the chaperone" who is tasked with maintaining order at the party by raising rates when necessary. "Surprise, surprise, the celebration is becoming a bit more boisterous," he commented.
In the Treasury markets, a sort of Trump effect has started to emerge in recent weeks. Investors anticipating rate cuts have been purchasing 2-year Treasurys, which has led to a decrease in the yield on those securities. Conversely, those who expect rates to rise over time have been selling 30-year Treasurys, resulting in an increase in the yield there.
The gap between the yields of 2-year and 30-year bonds—a crucial element of the yield curve—remained close to its widest point since early 2022, as reported by Dow Jones Market Data. Nevertheless, yields on long-term government debt are securely trading below 5%.
"That tends to be a level that disrupts the equity market," stated Lawrence Gillum, chief fixed-income strategist at LPL Financial.
On Friday, the University of Michigan's consumer-sentiment index for August came in slightly under expectations. The Federal Reserve’s favored inflation gauge for July did not move any closer to its 2% target.
The decline in the stock market was instead driven by a consistent source of strength: companies that provide chips, servers, and other tools for the AI surge. The Nasdaq led the downturn, falling by 1.1%, while the S&P 500 decreased by 0.6%. The Dow Jones Industrial Average dropped 0.2%, equating to a loss of 92 points.
A 3.4% decline made Nvidia one of the largest losers in the blue-chip index, intensifying a retreat since the company’s earnings report raised concerns about a slowdown in AI demand growth. Dell Technologies saw a drop of about 8.9% after issuing a profit forecast that was worse than anticipated, indicating weak margins on server sales. Marvell Technology shares plummeted 19% following a report that revealed data-center revenue fell short of expectations.
WASHINGTON—A coalition of House lawmakers from various political backgrounds has reached an agreement on a proposal aimed at prohibiting members of Congress from trading individual stocks. Advocates claim this represents the first genuine opportunity to curb the practice in over a decade.
The bipartisan legislation, which is scheduled to be revealed next week, allows lawmakers and their family members a 180-day window from the date of enactment to divest from individual stocks they possess, including those in blind trusts, as per a document reviewed by The Wall Street Journal. Newly elected lawmakers would have 90 days following their swearing-in to liquidate their stock holdings, according to the proposal.
Lawmakers who fail to comply would incur fines amounting to 10% of the investment's value and would be required to forfeit any profits gained, as outlined in the 10-page proposal. The legislation includes several exceptions, such as stocks awarded to spouses and dependent children as part of their employment compensation, according to the bill's text.
The proposal was brokered by Rep. Seth Magaziner (D., R.I.). The discussions involved conservative Reps. Chip Roy (R., Texas) and Tim Burchett (R., Tenn.), alongside progressives like Reps. Alexandria Ocasio-Cortez (D., N.Y.) and Pramila Jayapal (D., Wash.).
In recent months, there has been increasing momentum to restrict stock trading by members of Congress and their families. Fluctuations in the stock market related to tariffs have highlighted the trading activities of lawmakers. Supporters argue that implementing new restrictions could help rebuild trust in Congress.
Speaker Mike Johnson (R., La.) expressed his support for a trading ban earlier this year, yet he has not endorsed any specific proposal. Treasury Secretary Scott Bessent recently indicated his readiness to advocate for a ban on individual stock trading. He remarked, “People shouldn’t come to Washington to get rich. It undermines trust in the system.”
President Trump has stated that he is “conceptually” open to imposing further restrictions.
In 2012, lawmakers enacted the Stock Act, which required increased disclosures and explicitly prohibited trading based on nonpublic information. However, they have faced challenges in implementing a complete ban on trading, despite widespread support for such an initiative among both Congress and the electorate.
Critics of new stock-trading regulations have highlighted that insider trading is already prohibited. Officials from the Securities and Exchange Commission and the Justice Department are able to investigate any suspicious trading activities. Others argue that imposing stricter requirements on lawmakers, along with the taxes and costs associated with liquidating individual stocks, creates an undue burden on them.
According to an analysis of financial-disclosure filings, only about a third of House lawmakers and just under half of senators traded individual stocks or held them as assets while in office last year. It is more typical for lawmakers to invest in traditional mutual funds, which spread investments across a variety of stocks. These funds would not be impacted by the proposed trading ban.
Congress members have mentioned that they frequently gain access to information, including insights from senior government officials during classified briefings, which could indicate trends in the stock market. Lawmakers also negotiate legislation that may influence publicly traded companies and collaborate with committee staff to summon top executives for oversight hearings.
"We definitely possess insider information in this context. There's no doubt about that," stated Rep. Brian Fitzpatrick (R., Pa.), a moderate participant in the discussions, during an interview earlier this year. "Therefore, to ignore that fact, I believe, is quite dishonest."
A federal appeals court late Friday invalidated the Trump administration’s key tariffs, determining that the president had exceeded his emergency powers in altering U.S. trade policy.
The 7-4 decision from the U.S. Court of Appeals for the Federal Circuit supported a lower-court ruling that undermines a fundamental aspect of President Trump’s economic strategy. The majority concluded that the president overreached his authority under a 1977 statute known as the International Emergency Economic Powers Act, or Ieepa.
This ruling represents a major setback for one of the hallmark policies of Trump’s second term and paves the way for the case to be taken up by the Supreme Court. The appeals court has permitted the tariffs to stay in effect until mid-October, giving the involved parties time to petition the high court for a review of the case.
Trump expressed his discontent with the ruling in a post on Truth Social. “ALL TARIFFS ARE STILL IN EFFECT! Today a Highly Partisan Appeals Court incorrectly said that our Tariffs should be removed, but they know the United States of America will win in the end,” he stated.
In April, Trump enacted the so-called reciprocal tariffs on nearly all U.S. trading partners during an event he termed “Liberation Day,” which triggered several days of market turmoil and backlash from foreign governments. This led Trump to suspend many of the tariffs to facilitate negotiations with numerous foreign nations. Adjusted tariff rates were implemented in early August, although discussions with many countries are still ongoing.
According to estimates from the Tax Foundation, the reciprocal tariffs are expected to generate about 70% of the projected tariff revenue in 2026, while the administration is also looking to increase tariffs under other legal frameworks that remain unaffected by Friday’s ruling.
The decision has nullified levies that include a baseline tariff of 10% applicable to nearly all countries, along with higher tariffs on nations that the administration deems to be poor trade actors—and an extra set of tariffs specifically targeting Canada, China, and Mexico.
Even if the Supreme Court upholds this decision, it will not eliminate all of Trump’s tariffs from his second term. In addition to the so-called reciprocal tariffs, Trump has also levied various tariffs on sectors such as automobiles, steel, aluminum, and copper under a different national security mandate. These tariffs remain unaffected by the ruling, and the administration intends to broaden them in the coming months—partly as a safeguard in case the Ieepa tariffs are overturned.
In its ruling against Trump, the majority of the appeals court, in an unsigned opinion, stated that Ieepa “grants considerable authority to the President to take various actions in response to a declared national emergency, but none of these actions explicitly include the power to impose tariffs, duties, or similar charges, nor the authority to tax.” The court noted that the statute does not mention the term “tariff” or any synonyms like “tax” or “duty.”
The court emphasized that when “Congress intends to delegate to the President the authority to impose tariffs, it does so explicitly.” This is not surprising, as the fundamental Congressional power to levy taxes such as tariffs is exclusively held by the legislative branch according to the Constitution.
The court remarked that the “unprecedented” and “transformative” nature of the tariff policy invoked the major questions doctrine—a term coined by the Supreme Court when it invalidated Biden administration policies, like student debt relief, which the justices believed extended far beyond the regulatory powers granted to the executive branch by Congress.
The court did not divide along party lines; judges appointed by presidents from both parties were present on each side.
Dissenting judges argued that Congress had paved the way for extensive actions like Trump’s global tariff policies. “IEEPA represents a clear congressional grant of extensive emergency authority in this area of foreign affairs, which naturally goes beyond the powers available under non-emergency legislation,” Judge Richard Taranto stated on behalf of the dissenters.
The Trump administration contended that IEEPA empowered the president to broadly apply tariffs to regulate imports during a national emergency, citing the trade deficit among other concerns. However, it admitted that no prior president had utilized IEEPA in such a manner.
In implementing additional tariffs on Canada, China, and Mexico, the administration claimed these countries had not done enough to curb the trafficking of fentanyl across U.S. borders.
Trump’s tariffs faced immediate legal challenges from a coalition of Democratic-led states and small businesses, who argued that the law did not grant Trump the authority to impose the tariffs at all.
A three-judge panel from the Court of International Trade concurred and annulled the tariffs in May. That ruling was temporarily suspended while the administration appealed to the Federal Circuit. All 11 active judges of the appeals court reviewed the case.
In anticipation of the ruling, leading attorneys for the Trump administration dispatched a letter to the appeals court, cautioning that a decision against the president would result in "catastrophic consequences." They highlighted agreements made with the European Union, Indonesia, the Philippines, and Japan. They argued that even if the court were to annul the tariffs, such a ruling should be delayed.
"Our nation would struggle to repay the trillions of dollars that other nations have already pledged, potentially leading to financial disaster," they stated. "The President is concerned that a forced termination of these agreements could trigger a situation reminiscent of 1929."
On Friday, the challengers rejoiced at the ruling. "This decision safeguards American businesses and consumers from the unpredictability and damage caused by these illegal tariffs," remarked Jeffrey Schwab, litigation director for the Liberty Justice Center, which filed the case on behalf of a small wine importer.
Investors are anticipating outstanding results from Nvidia NVDA -0.74% decrease; red down pointing triangle, the world’s most valuable company, which has contributed to the S&P 500 achieving yet another record close.
The chip manufacturer’s earnings report, set to be released after the market closes on Wednesday, serves as a crucial benchmark for the AI-driven bull market that has propelled U.S. stock indexes upward this year. Nvidia is projected to announce record-breaking revenue and adjusted operating income.
"That is the only thing in the equity market that matters today," remarked Joseph Brusuelas, chief economist at RSM.
According to data from Option Research & Technology Services, investors are anticipating a 6.2% fluctuation in Nvidia’s stock following its report. The company’s stock reached a record high of $164.10 on Wednesday.
The S&P 500 increased by 0.2% to 6481.4, marking its 19th record close of the year. The tech-heavy Nasdaq composite also saw a slight rise of 0.2%, while the Dow Jones Industrials gained 147.2 points to finish at 45565.2, its second-highest close in history.
