Market Matters – Supreme Court Slap!

Markets absorbed macro and political shocks with resilience,

leaving global equities broadly unchanged. The UK outperformed (+2.7%), Europe gained (+2.3%), and the S&P 500 rose just over 1%, even as software and cybersecurity stocks underperformed.

US growth softened but remained fundamentally intact.

Headline GDP slowed to 1.4% due largely to the government shutdown, which subtracted roughly one percentage point from growth, leaving underlying activity closer to 2.4–2.5%. AI‑driven capex remains a major support, with four large tech firms expected to invest ~$650bn in 2026 .

The Supreme Court’s ruling materially constrains the administration’s tariff authority,

striking down most of the existing regime and forcing a shift to narrower, procedural tools. While the White House imposed a temporary 10–15% levy, the ruling reaffirms the rule of law and reduces the likelihood of abrupt escalation, with potential importer refunds adding near‑term fiscal impulse .

UK data surprised positively,

with a record January budget surplus (£30.4bn), easing gilt yields, a 20‑month high in retail sales, and a PMI rebound to 53.9. Despite caveats around one‑offs and rising unemployment, the UK’s sector mix — less exposed to the most crowded AI themes — supported relative market resilience .

Europe showed incremental improvement,

with the composite PMI rising to 51.9 and German manufacturing expanding for the first time in three years. Meanwhile, AI‑related competitive fears triggered sharp rotation out of software and cyber, though cybersecurity remains mission‑critical to the global economic picture, this sell-off was indiscriminate .