Stocks Rise as Justices Question Tariff Powers, Tesla Vote Looms, and AMD Gains on AI

Stocks ended higher Wednesday, with the Dow up about 0.5% (+226 points), the S&P 500 rising roughly 0.4% (+25), and the Nasdaq gaining about 0.7% (+151). Commodities split: U.S. crude fell to about $59.60 a barrel (down 1.6%), while gold climbed to just under $4,000 an ounce (up 0.9%). The advance came as Supreme Court skepticism toward emergency tariff powers eased a policy overhang and private-sector readings pointed to steady growth. AI enthusiasm buoyed chip shares, including those of AMD, and attention turned to Tesla’s high-stakes shareholder meeting regarding its autonomy and robotics push.

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Court Signals Limits on IEEPA Tariffs

The Supreme Court dove deep into the Trump administration's tariff policy. During oral arguments, several justices pressed the government on using the International Emergency Economic Powers Act to impose sweeping tariffs, questioning whether broad trade measures properly fit an “emergency” statute and pointing to narrower authorities with clearer limits. The bench also appeared attentive to the risk of market disruption, with discussion of prospective-only remedies that would avoid forcing Treasury to refund months of collections—a scenario bond traders had flagged as a fiscal shock. Stocks rallied throughout the session as skepticism toward the government’s position grew, with small caps, often the most tariff-sensitive, leading the gains. A decision is unlikely before late November.

Data Could Keep the Fed on Hold

The latest readouts from purchasing managers and employment trackers suggest growth remains firm and price pressures are moderating only gradually—conditions that lessen the urgency for a near-term rate cut. S&P Global’s Services PMI printed 54.8, marking continued expansion with cooling output-price inflation, even as business confidence softened amid political and tariff uncertainty. Derivatives markets reflected the recalibration: odds of a December cut fell back toward roughly two-thirds, a shift consistent with a “higher-for-longer” stance.

AMD’s AI Case Strengthens

CFRA reiterated a Strong Buy on Advanced Micro Devices and raised its 12-month target to $300 from $250, citing a resurgence in server CPUs and confidence in the company’s next-gen AI lineup (MI400/Helios with ROCm). The firm highlighted momentum across hyperscalers and “neoclouds,” as well as a partnership that it believes could drive “well over $100 billion” in sales over the next four to five years—potentially changing the scale of AMD’s AI business. Recent results topped expectations, though management flagged export-control and margin-mix risks as AI shipments scale.

Tesla’s Shareholder Showdown

Investors turn Thursday to Tesla’s annual meeting, where votes on Elon Musk’s updated compensation plan and a proposed strategic investment in xAI headline the agenda. Wedbush’s Daniel Ives expects approval: “We expect Musk to get overwhelming shareholder approval on the potential $1 trillion pay package … and send a loud and clear message to Elon being ‘wartime CEO’ during this most important chapter of growth in Tesla’s history as the AI Revolution is here.” Wedbush rates Tesla Outperform with a $600 price target.

The proxy outlines steep performance hurdles, including the rollout of one million robotaxis in commercial operation and one million Optimus deliveries, alongside new adjusted-EBITDA milestones. The package would authorize roughly 423 million additional shares, approximately 12% of the float, potentially increasing Mr. Musk’s voting power to around 25%, a level Wedbush views as crucial to retaining him at the helm during what it calls the most critical phase in the company’s history. The xAI stake is pitched as a way to accelerate Tesla’s AI capabilities over the next 12 to 18 months.

What’s Next

A Supreme Court ruling that narrows IEEPA tariff use without retroactive refunds would remove a tail risk while nudging trade policy toward narrower, statute-bound tools. For markets, the macro mix suggests that earnings will do more heavy lifting into year-end, with AI-exposed names trading on delivery, supply, and margin execution rather than headline total addressable market claims. For Tesla, a “yes” vote would codify an AI-centric strategy and refocus on product, scaling, and profitability milestones.