Taipei: A recent ruling by the United States Supreme Court that declared President Donald Trump’s global tariffs unconstitutional is anticipated to positively impact Taiwan’s stock market, according to an analyst. The decision, which was made in a 6-3 vote, found that the Trump administration’s application of the International Emergency Economic Powers Act to impose tariffs was unlawful.

According to Focus Taiwan, Fan Chen-hung, the president of Capital Investment Management Corp., stated that the ruling should be considered somewhat favorable for the Taiwan Stock Exchange when it resumes trading after the Lunar New Year holiday. Although Taiwan’s major exports, like semiconductors and electronic components, were already exempt from these tariffs, the decision is expected to benefit non-tech manufacturers, particularly apparel and footwear producers.

Fan noted that while the court’s decision would likely have a limited direct impact on the local stock market, investor sentiment would be more significantly influenced by the earnings report of Nvidia Corp., which is set to be released on Wednesday. The U.S. stock market had reacted positively to the court’s decision, with major indexes, including technology and semiconductor shares, experiencing gains.

Despite the positive market reaction, caution prevailed after Trump hinted at plans to introduce a new 10 percent global tariff. This led to fluctuations in shares of tariff-sensitive retail and apparel companies, with Nike Inc. experiencing a brief surge before closing lower and Walmart Inc. also ending the day down. Meanwhile, stocks related to artificial intelligence, such as Nvidia, continued to rise, and Taiwan Semiconductor Manufacturing Co.’s American depositary receipts closed higher.

Separately, Chang Cheng-chung, a fund manager at First Securities Investment Trust Co., expressed optimism about the AI sector’s role in supporting market gains in Taiwan. He highlighted that the U.S.’s four major cloud service providers have confirmed capital expenditures of approximately US$660 billion for the year, representing a 60 percent increase from the previous year. This increased spending is expected to sustain orders for Taiwan’s AI supply chain and bolster earnings growth.