(Bloomberg) — Emerging-market assets got a boost after the US Supreme Court struck down President Donald Trump’s sweeping global tariffs, with currencies erasing weekly losses and an exchange-traded fund hitting a record high.
An MSCI Inc. A gauge of developing-nation currencies rose less than 0.1% on Friday, holding gains after Trump touted alternatives to his signature economy plan. BlackRock Inc.’s $28 billion iShares MSCI Emerging Markets ETF climbed to an all-time high, with trading volume 36% above its 20-day average.
“This should be marginally positive for EMFX, mostly because it underestimates the policy uncertainty out of the US,” said Alvaro Vivanco, emerging markets macro strategist at Wells Fargo. It “gives a push to the diversification theme.”
After the ruling, Trump told reporters he’ll impose a 10% global tariff under Section 122 of the Trade Act of 1974, but it wasn’t clear if the US state would have to return funds already levied. The decision pushed long-dated Treasury yields higher, as traders weighed the risk of a wider budget deficit in the US.
“The 10%, Section 122-tariffs are likely to be lower than a lot of the higher reciprocal tariff rates,” said Dan Pan, an economist at Standard Chartered Bank in New York.
Earlier in the day, traders digested a batch of data pointing to weaker-than-expected economic activity and persistent inflation in the US economy.
US gross domestic product rose at a much slower-than-forecast pace in the fourth quarter, while the Federal Reserve’s preferred measure of underlying inflation topped expectations. The data sent contradictory signals on the outlook for interest rates as traders remain focused on the scale and timing of the next move by the Fed.
US-Iran tensions lingered, even though most strategists do not expect them to escalate into a full-scale war that would derail the year-to-date rally across emerging markets. Trump said Friday that he’s considering a limited military strike on Iran.
Stocks notched a second straight week of gains, extending a rally that has been driven by optimism on AI-related names.
“The fundamental drivers of EM equities should largely remain in place,” said Wolf von Rotberg, equity strategist at Bank J Safra Sarasin. “Record-high US hyperscaler capex props up demand for chips in 2026 and is one driver of metals prices.”
India’s rupee lagged its peers, declining 0.3%. Traders said the central bank had intervened to support the currency.
In credit markets, Kenya bonds underperformed following the country’s bond sale earlier this week. Mozambique’s dollar notes due 2031 also lagged after the International Monetary Fund warned the nation’s debt was unsustainable.
–With assistance from Leda Alvim, Giovanna Bellotti Azevedo, Carolina Wilson and Carter Johnson.
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