A protester with the Main Street Alliance holds a sign outside the U.S. Supreme Court, as its justices are set to hear oral arguments on U.S. President Donald Trump’s bid to preserve sweeping tariffs after lower courts ruled that Trump overstepped his authority, in Washington, D.C., U.S., November 5, 2025.
Nathan Howard | Reuters
Traders slashed odds that the Supreme Court will uphold President Donald Trump’s aggressive tariffs after justices on Wednesday signaled doubts about the legality of the administration’s sweeping trade powers.
On Kalshi, contracts tied to whether the court would rule in favor of Trump’s tariffs slipped to around 30% from nearly 50% before Wednesday’s hearing.
A similar contract on platform Polymarket dropped to about 30% from more than 40% earlier in the week, reflecting traders’ growing belief that the justices may strike down the policy.
The moves came after several conservative justices joined their liberal colleagues in expressing unease about the broad authority Trump claimed under the International Emergency Economic Powers Act to impose tariffs on imports. They sharply questioned Solicitor General D. John Sauer on the Trump administration’s legal justification of the tariffs, which critics say infringes on the power of Congress to tax.
Lower federal courts have ruled that Trump lacked the legal authority to impose the so-called reciprocal tariffs on imports from many U.S. trading partners, and fentanyl tariffs on products from Canada, China and Mexico.
Prediction markets, which allow traders to bet on real-world events, often react swiftly to perceived signals during high-profile court hearings. Wednesday’s shift suggested that traders viewed the justices’ tone as an indicator of headwinds for the president’s trade agenda.
The Supreme Court will not issue a decision in the case on Wednesday. It is not clear when the court will release its ruling.