Emerging markets climb as US Supreme Court strikes down tariffs

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• Emerging-market currencies rise after US Supreme Court tariff ruling
• Latin American currencies, South African rand reach session highs
• India's rupee fell 0.3% as central bank intervened to support it

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Emerging-market currencies reversed losses and stocks extended gains after the US Supreme Court struck down President Donald Trump’s sweeping global tariffs.

An MSCI Inc. gauge of developing-nation currencies rose 0.1% as of 10:20 a.m. in New York Friday. Latin American currencies and the South African rand immediately climbed to session highs following the 6-3 decision by the court.

“This should be marginally positive for EMFX, mostly because it underscores the policy uncertainty out of the US,” said Alvaro Vivanco, emerging markets macro strategist at Wells Fargo. It “gives a push to the diversification theme.”

Ahead of the ruling, traders digested a batch of data pointing to weaker-than-expected economic activity and persistent inflation in the US economy.

US gross domestic product rose at a much slower-than-forecast pace in the fourth quarter, while the Federal Reserve’s preferred measure of underlying inflation — the core personal consumption expenditures price index — topped expectations. The data sent contradictory signals on the outlook for interest rates as traders remain focused on the scale and timing of the next move by the Fed.

US-Iran tensions lingered, even though most strategists do not expect them to escalate into a full-scale war that would derail the year-to-date rally across emerging markets. Donald Trump said Friday that he’s considering a limited military strike on Iran.

Stocks are on track for a second straight week of gains, extending a rally that has been driven by optimism on AI-related names.

“The fundamental drivers of EM equities should largely remain in place,” said Wolf von Rotberg, equity strategist at Bank J Safra Sarasin. “Record-high US hyperscaler capex props up demand for chips in 2026 and is one driver of metals prices.”

India’s rupee lagged its peers, declining 0.3%. Traders said the central bank had intervened to support the currency.

In credit markets, Kenya bonds underperformed following the country’s bond sale earlier this week. Mozambique’s dollar notes due 2031 also lagged after the International Monetary Fund warned the nation’s debt was unsustainable.