In a dramatic shift on Wednesday, traders sharply cut the probability that the U.S. Supreme Court will support former President Donald Trump’s sweeping tariff strategy, after several justices openly questioned the administration’s legal foundation for its trade maneuvers. The reaction in prediction markets reflected mounting skepticism about whether the court will endorse Trump’s expansive interpretation of presidential trade authority.

On the prediction platform Kalshi, the likelihood that the Supreme Court would uphold Trump’s tariffs sank to roughly 30 percent, falling from nearly 50 percent prior to the arguments. A parallel contract on Polymarket dropped to around 30 percent as well, sliding from above 40 percent earlier in the week. These market moves signaled a clear shift in sentiment as investors interpreted the court’s tone as a potential setback for Trump’s trade policies.

The case centers on Trump’s use of the International Emergency Economic Powers Act to impose tariffs on a wide range of imported goods, a move his administration defended as necessary to respond to economic threats. However, during oral arguments, both conservative and liberal justices showed hesitation toward embracing such a broad executive power. Several questioned whether the president had exceeded constitutional boundaries by effectively taking over a responsibility reserved for Congress: the authority to levy taxes and tariffs.

Chief among the challengers’ arguments is that Trump’s approach to tariff enforcement undermined the separation of powers and bypassed established trade procedures. Critics argue that granting presidents such latitude would open the door to unchecked use of emergency powers, potentially destabilizing international trade relations and weakening legislative oversight.

Lower courts previously sided against the Trump administration, ruling that it lacked the legal authority to introduce reciprocal tariffs on numerous U.S. trading partners and to impose fentanyl-related tariffs on certain goods from Canada, China, and Mexico. These decisions set the stage for the Supreme Court review, turning the case into a major test of executive power in trade policy.

Prediction markets, known for rapidly responding to political and legal signals, moved swiftly as the justices’ questions unfolded. Investors often view courtroom tone and questioning as early indicators of the likely outcome, and Wednesday’s reaction suggested growing doubts about the durability of Trump’s tariff policy under judicial scrutiny.

Despite the intense market reaction, it remains uncertain when the Supreme Court will deliver its final ruling. The justices offered no timeline, leaving both investors and policymakers waiting for clarity. Until then, traders and global markets will continue to monitor developments closely, aware that the eventual decision could influence not only U.S. trade strategy but also the future scope of presidential authority in economic affairs.