The U.S. Supreme Court made waves on Friday, ruling that President Trump doesn't have the legal authority to impose tariffs under the International Emergency Economic Powers Act. Trump pivoted to a different way to at least temporarily implement tariffs worldwide of 10% -- later raised to 15% -- but the market reacted positively to the judicial setback.
This is good news for for Nike (NKE 2.82%), Target (TGT 2.67%), and Home Depot (HD 2.75%), along with many other consumer-facing giants that have come under fire since the tariffs were initially introduced more than 10 months ago.
Image source: Getty Images.
The upticks didn't happen right away as the news broke. Target and Home Depot moved less than 1% higher on Friday's news. Nike stock actually closed slightly lower by the end of the trading day. But the development was a massive win for the three companies.
Even if Trump's proposed tariffs are eventually passed on to consumers by retailers and manufacturers, lower ceilings should keep the increases more manageable. Let's take a closer look at how the Supreme Court's decision could turn headwinds into tailwinds for Nike, Target, and Home Depot.
NYSE: NKE
Key Data Points
Just do it
Nike has problems beyond the past year of tariff volatility. Even before Trump's Liberation Day sell-off in early April of last year -- a pullback that the shares have since overcome -- the iconic footwear maker has struggled to connect with growth investors.
Nike has delivered double-digit revenue growth just once in the past decade of fiscal years. The "swoosh" is ubiquitous, but the swoon also cuts sharp: Nike stock has lost more than half of its value over the past five years. Revenue declined 10% in its fiscal 2025, which ended in May, while net income plummeted more than 40%, and margins have only continued to deteriorate into fiscal 2026.
Nike outsources the production of its footwear and much of its apparel to Asia. Vietnam is its largest manufacturing hub. That means the tariff war has pinched Nike's profitability, even if it has a larger challenge in getting consumers worldwide to load up on Nike products again.
Red bull's-eyes and orange aprons
Like Nike, Target and Home Depot also have problems beyond the recent margin-gnawing tariffs. Target is losing market share to other mass-market retailers. It's wrapping up its third straight year of negative sales growth. Target stock is down nearly 40% over the past five years.
Home Depot, meanwhile, is suffering from a sluggish housing market. Stiff interest rates are also cooling interest in home refis to bankroll makeover projects. Its net margin is declining for the third consecutive year.
A tamer tariff burden could help. Target has trimmed its supply chain exposure to China in recent years, but a good chunk of its apparel, home decor, consumer electronics, and toys are still sourced from overseas. And nearly half of Home Depot's sales come from imported products. Home Depot reports fresh financials on Tuesday morning, so look for some new color from the leading home improvement chain.
All three stocks kept their gains in check on Friday. If revised tariffs are kind -- and margins start to widen for all three companies -- don't be surprised if the upticks start to happen.
