NEW ORLEANS – U.S. stocks, including the Dow Jones Industrial Average and S&P 500, fell sharply on Jan. 23 after Trump signaled plans to raise the baseline import tariff rate to 15% following the U.S. Supreme Court's decision which struck down the President's tariffs. Renewed concerns about artificial intelligence also weighed on markets.
The selloff followed a Feb. 20 U.S. Supreme Court ruling that found tariffs imposed under the International Emergency Economic Powers Act (IEEPA) unconstitutional. On Jan. 22, President Trump said in a social media post that he would raise the baseline tariff rate on imports from 10% to 15%.
Markets initially rallied after the court invalidated many of the tariffs, raising hopes that trade tensions might ease. But sentiment shifted after Trump signaled he would increase the baseline rate, renewing uncertainty about the direction of U.S. trade policy.
On Jan. 23, the Dow Jones Industrial Average dropped roughly 1.7%, or more than 800 points. The S&P 500 and the tech-heavy Nasdaq Composite each declined more than 1%, retreating from a volatile but positive session on Jan. 20.
Lawmakers indicated there is no clear legislative path forward. On Jan. 23, House Speaker Mike Johnson (R-La.) said Congress may not approve the President’s plan.
“It’s going to be, I think, a challenge to find consensus on any path forward on the tariffs, on the legislative side,” Johnson told reporters. “And so that is why, I think, you see so much of the attention on the executive side, the executive branch, and what they’re doing and how they’re reacting to the ruling.”
Tariff Legal Cases
The court’s ruling has also triggered a wave of additional corporate litigation. A growing number of major companies have filed lawsuits seeking refunds for tariffs imposed under IEEPA.
Among the companies pursuing reimbursement are FedEx, Costco Wholesale Corp., Revlon Consumer Products, Bumble Bee Foods and Kawasaki Motors Manufacturing. Additional manufacturers and global firms, including Toyota, BYD, Goodyear Tire & Rubber Co. and Alcoa, have also moved to recover duties paid under the now-invalidated tariff authority.
Most of the cases have been filed in the U.S. Court of International Trade, with companies seeking full repayment of tariffs collected under the emergency powers statute. Legal analysts expect additional claims as importers move to secure refunds.
International Trade Fallout
The uncertainty also reverberated abroad. On Jan. 22, the head of the international trade committee in the European Parliament, Bernd Lange, called the situation “pure tariff chaos on the part of the US government" and proposed pausing approval of the E.U.’s trade deal with the U.S.
In addition, officials from India postponed a planned trip to the U.S. to finalize a trade agreement amid renewed uncertainty surrounding U.S. tariff policy.
In Jan., India and the European Union finalized a trade agreement that officials describe as creating the world’s largest free trade zone. Analysts say the pact positions the E.U. to capture expanded market access and investment flows with one of the world’s fastest-growing major economies — gains the United States could risk missing if trade negotiations stall and tariff volatility persists.
AI Concerns
Tariff volatility was not the only pressure on markets. Concerns about AI-driven disruption resurfaced after Anthropic announced a new AI tool designed to automate analytical and advisory work typically performed by consulting firms, intensifying worries about pressure on white-collar business models.
Shares of IBM fell 13%, while Accenture and Cognizant Technology Solutions also posted losses. In addition, broader sectors including software, real estate and logistics have come under pressure in recent weeks amid fears that AI tools could compress margins and displace certain service-based revenue streams.
Investors are now turning their attention to earnings from Nvidia, scheduled for release on Jan. 25. The AI chipmaker’s results are expected to serve as a key barometer for continued investment in AI infrastructure. Shares of Nvidia were among the few gainers on Jan. 23, bucking the broader market downturn.
