The US stock market is expected to open on a cautious note in Friday’s session, January 9, as traders brace for two back-to-back risk events that could set the tone for the world’s largest market in the near term.
In pre-market trade, all three key benchmarks were trading flat. Dow Jones Industrial Average futures were up 6 points or 0.01%, the S&P 500 remained largely unchanged, and Nasdaq-100 futures were mildly higher by 0.10%.
The rebound on Wall Street from April’s tariff-driven slump is likely to face a key test, as the US Supreme Court is set to deliver its verdict on US President Donald Trump’s tariffs later today.
Traders are also bracing for the US payrolls report, which could offer further clarity on the US Federal Reserve’s interest rate cut path, following recent mixed economic data that provided limited cues on future monetary easing.
Soon after taking charge as US president for a second term in January 2025, Trump reopened his tariff playbook, this time targeting a wider set of trading partners, including India, changing the world order, which had remained intact for decades.
He announced tariffs in the range of 10–50% in April. While some countries have signed trade deals with the US, others are still engaged in discussions, with India being one of them.
Trump’s tariffs were challenged in courts, and lower federal courts, as Mint reported, have already ruled that many of the tariffs exceeded presidential authority under existing laws.
They stated that the statute used by the Trump administration does not explicitly empower a president to impose broad import duties. This power has traditionally been reserved for Congress under the US Constitution.
The US Supreme Court will now decide whether Trump can use the International Emergency Economic Powers Act (IEEPA) to impose tariffs without congressional approval. During arguments on November 5, the court’s conservative majority expressed serious concerns over this interpretation of federal law.
The ruling could have wide-ranging implications for US trade policy and fiscal health and may mark Trump’s biggest legal setback in his second term.
Analysts see high probability of Supreme Court ruling against Trump on tariffs
Avinash Gorakshkar, a SEBI-registered fundamental equity analyst, said the US stock market is expected to remain sideways to negative, as the market is expecting the Supreme Court’s ruling on tariffs may go against US President Donald Trump.
Gorakshkar noted that if that happens, the US government will have to reimburse $192 billion in tariffs received from various countries in 2025 and an additional $65 billion in tariffs received in 2026. He pointed out that this is expected to put pressure on the US dollar and inflation.
Gorakshkar cautioned that such a development will have a detrimental impact on the US economy, which is already facing a $38 trillion debt crunch.
Meanwhile, Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said there is a high probability of the verdict going against Trump. He stressed that the details are significant—whether it would be a partial striking down of the tariffs or a complete declaration of the tariffs as illegal.
The market reaction would depend on these details. He noted that if the Supreme Court declares Trump’s tariffs illegal, there would be a rally in India since India has been the worst affected by the 50% tariffs.
Wall Street charts flash breakout signals across key indices, says analyst
Anshul Jain, Head of Research at Lakshmishree, said the Dow Jones has confirmed a breakout from a 38-day cup-and-handle formation, with the pattern resting cleanly on the rising 10-, 20-, and 50-day moving averages. Jain noted that the breakout has come with strong volume expansion, validating participation and signalling fresh momentum entry rather than short covering alone.
He highlighted that the aligned moving averages are now acting as a firm launchpad, supporting continuation across timeframes. The price structure remains tight above the breakout zone, reducing the risk of immediate failure.
“If follow-through is sustained, the index can head toward the 50,500 zone in the near term. Beyond that, an extension toward 52,000 becomes achievable as momentum builds. Risk stays favourable as long as price holds above the moving average cluster, with any shallow pullbacks likely to attract buyers rather than sellers,” he said.
Turning to the Nasdaq, Jain pointed out that the index is compressing into a well-defined 66-day triangle on the daily chart, followed by a visible pickup in buying pressure toward the latter part of the formation. He explained that the final leg of the pattern is evolving into a bullish cup-and-handle-like structure, signalling absorption of supply and strengthening upside momentum.
Jain stressed that prices continue to respect rising short-term averages, reinforcing trend support across timeframes. He sees this dual setup of triangle compression and cup-and-handle behaviour as pointing to an imminent directional expansion.
He further expects that a decisive breakout and sustained hold above 25,800 would confirm momentum release and open the door for an initial move toward the 26,600 zone. Volume behavior remains constructive, suggesting participation is expanding rather than thinning. Risk–reward favors the upside as long as the index holds above the pattern base, with failed breakouts remaining the key invalidation risk.
On the S&P 500, Jain said the index has confirmed a breakout from a 38-day cup-and-handle formation near 6,925, with the pattern firmly resting on the rising 10-, 20-, and 50-day moving averages.
He noted that the breakout has come with strong volume expansion, signalling fresh long participation rather than mere short covering, and highlighted that the alignment of short- and medium-term averages is acting as a solid launchpad, reinforcing trend strength across timeframes. He observed that price action above the breakout zone remains tight, reducing the risk of immediate failure.
Jain expects that if the index sustains above 6,925, momentum can carry it toward the 7,040 zone in the near term, while he added that an extension toward 7,120 becomes achievable as follow-through builds. Jain maintained that risk remains favourable as long as prices hold above the moving average cluster, with any shallow dips likely to attract buyers.
Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.