Jefferies cautions investors not to relax ahead of the Supreme Court’s ruling on the IEEPA tariffs. In a note, analyst Aniket Shah warned that while markets expect invalidation, outcomes can defy predictions. The firm stresses that oral‑argument signals are imperfect and that surprises remain possible for all traders.

The November 5 hearing shifted sentiment when at least five justices voiced deep skepticism of the government’s broad interpretation of IEEPA, emphasizing that tariff‑setting is fundamentally Congress’s domain. This shift pushed expectations toward a strong consensus that the tariffs would be invalidated, but Jefferies remains cautious for investors.

Jefferies highlights tail risk by citing NFIB v. Sebelius, where the Court upheld the individual mandate 5‑4 despite near‑unanimous expectations. The example shows that justices’ views can evolve and that aggressive questioning does not guarantee a final position, underscoring the potential for a market‑jolt if tariffs survive for.

With tariffs priced in, a surprise ruling upholding duties could trigger a sell‑off in tariff‑sensitive stocks and spike volatility. Jefferies advises hedging ahead of the decision and notes that domestic manufacturers may retain an advantage if tariffs persist. Investors should monitor the Court’s final stance through late February.