Amazon, Nike, and Etsy Led Retail Stocks to Their Best Day of 2026 After the Supreme Court Removed America's Import Tax Burden

For the better part of a year, retail stocks have traded under a shadow. The tariffs imposed under the International Emergency Economic Powers Act pushed import costs to levels not seen in nearly a century, squeezing margins on everything from sneakers to semiconductors and forcing companies to choose between absorbing the cost or passing it to consumers. On Friday, the Supreme Court removed that shadow in a single ruling, and the market's response was immediate and broad.

Amazon surged 2%, adding roughly $40 billion in market value as investors recalculated the e-commerce giant's logistics and product costs. Alphabet climbed nearly 4%, partly on tariff relief and partly on the broader risk-on sentiment that followed the ruling. Nike and Deckers Outdoor each gained 2%. Floor and Decor, the specialty flooring retailer that sources heavily from Asia, jumped more than 5%. Crocs, Abercrombie and Fitch, RH, and Wayfair all posted gains that ranked among their best sessions of the year.

The retail sector, measured by the S&P 500 Retailing sub-index, posted its strongest single-day advance since the November 2024 post-election rally. For investors who had been underweight retail on tariff risk, Friday was the day the thesis broke.

The Margin Math Just Changed

To understand why the ruling matters so much for retail stocks specifically, you need to understand how tariffs were flowing through the income statement. The typical American retailer sources 30% to 70% of its merchandise from overseas, with the percentage skewing higher for apparel, footwear, electronics, and home goods. Under the IEEPA tariff framework, effective duty rates on Chinese goods had reached 104%, and rates on goods from other countries ranged from 10% to 50% depending on the category and origin.

Companies responded in three ways. Some, like Walmart, absorbed a portion of the cost to maintain competitive pricing, sacrificing margin. Others, like Nike, passed the costs through to consumers, accepting lower volumes in exchange for preserved profitability. A third group, including many mid-sized retailers, attempted to diversify their supply chains away from China, a process that typically takes 12 to 24 months and involves significant upfront costs.

The Supreme Court ruling does not eliminate all tariffs. Country-specific duties on China under Section 301, the 25% tariff on steel and aluminum under Section 232, and the new 10% global tariff under Section 122 all remain in effect. But the removal of the IEEPA framework represents a dramatic reduction in the overall tariff burden, particularly for companies that source from countries outside of China. For a retailer importing goods from Vietnam, Bangladesh, or India, the effective tariff rate dropped from as high as 30% to 40% under the IEEPA regime to roughly 10% under Section 122.

That difference flows directly to the bottom line. Goldman Sachs estimated Friday afternoon that the ruling could add 100 to 200 basis points of gross margin to the average S&P 500 retailer over the next two quarters as the lower tariff rates take effect on new import shipments.

The Winners and Why

Not every retail stock benefited equally. The biggest winners were companies with the highest exposure to non-China Asian manufacturing, where the tariff reduction was most dramatic.

Amazon benefits on multiple fronts. Its first-party retail business imports billions of dollars in electronics, home goods, and private-label products. Its third-party marketplace, which accounts for more than 60% of unit sales, becomes more competitive as lower tariffs reduce the cost of goods for its millions of sellers. And its advertising business benefits indirectly as sellers increase marketing budgets when their margins improve. The 2% move added roughly $40 billion in market value, but analysts at Morgan Stanley argued the tariff relief could be worth $3 billion to $5 billion in incremental annual operating income.

Nike sources approximately 50% of its footwear from Vietnam and 25% from Indonesia. Under the IEEPA framework, both countries faced elevated tariff rates that forced Nike to implement multiple rounds of price increases throughout 2025. The reduction to a 10% baseline allows the company to either restore some of those price increases or, more likely, use the margin improvement to reinvest in demand-driving activities like marketing and innovation.

Etsy benefits in a unique way. The handmade and vintage marketplace had seen a surge in domestic-made goods as sellers shifted production to avoid tariffs. While that trend will continue, the lower tariff environment also makes it easier for Etsy's international sellers to ship directly to U.S. buyers, expanding the platform's assortment and improving the buyer experience.

Floor and Decor, Wayfair, and RH all source heavily from China and Southeast Asia for their home goods and furniture products. These are high-weight, low-margin items where tariff costs are particularly impactful. The 5%+ moves in these stocks reflect the market's recognition that the margin relief for home goods retailers could be the most significant in the entire sector.

The Caution: Section 122 Is Temporary

Before investors declare victory, there is an important caveat. The Section 122 tariff that replaced the IEEPA framework expires after 150 days unless Congress votes to extend it. That sunset date falls around July 19, 2026, creating a window of uncertainty that will hang over retail stocks throughout the spring and early summer.

If Congress extends or replaces the tariff with a permanent legislative framework, the current rate structure becomes durable and the margin improvement is real. If the tariff expires without replacement, the effective rate on many imports drops further, creating an even larger tailwind. But if the political environment shifts and higher tariffs are reimposed under a different authority, the margin gains could reverse.

Retailers are already navigating this uncertainty. Several companies indicated on earnings calls this week that they are placing orders at the lower Section 122 rates but are hedging by maintaining diversified supplier networks in case rates change again. The smart money is treating Friday's rally as a structural improvement with a six-month shelf life, not a permanent all-clear signal.

The Investing Takeaway

For investors looking to position around the tariff relief, the clearest opportunities are in retailers with high import exposure, strong pricing power, and the operational flexibility to quickly capture margin improvements. Amazon, Nike, and the home goods retailers fit that profile.

The riskier bets are the pure-play importers with thin margins and high leverage, companies where the tariff relief prevents distress rather than creates growth. Dollar stores, discount retailers, and some mid-cap apparel brands fall into this category. The tariff reduction helps, but it may not be enough to offset the broader consumer spending slowdown that the GDP and PCE data confirmed Friday morning.

Friday was unambiguously a good day for retail stocks. Whether it was the beginning of a sustained recovery or a one-day event depends on what Congress does next, and on whether the American consumer, still facing 3% core inflation and a savings rate below 4%, has enough purchasing power left to meet the retailers halfway.