The night before Federal Reserve policy: the dual test of the "hundred-billion tariff verdict" and the "non-farm employment report"

Written by: Wall Street Insights

This weekend is destined to be turbulent.

The market is holding its breath, awaiting a true “big test.” From the Supreme Court’s “hundred-billion-dollar tariff ruling,” to the “tariff stick” against metals, and the passive fund’s “forced sell-off,” this week’s market is at the center of multiple storm centers.

The three major key events erupting intensively will ultimately profoundly reshape market trends, directly impacting the pricing logic of US stocks, US bonds, and precious metals markets.

Additionally, at 21:30 on January 9 (Friday) Beijing time, the U.S. Bureau of Labor Statistics (BLS) will release the December Non-Farm Payrolls report.

After weeks of government shutdown causing a data vacuum, this report will serve as a “reliable reading” for market assessment of economic health, and it is also the most decisive reference before the Federal Reserve’s January policy meeting, directly influencing its policy choice of “holding steady” or “continuing to cut rates.”

At this “big test” juncture, buckling up and remaining vigilant to volatility risks may be the best strategy.

Below, we analyze these major ongoing upheavals one by one.

01 1000 Companies “Surround” the White House: Will the Hundred-Billion-Dollar Tariffs Be Reversed?

Washington is staging an unprecedented legal “siege.”

According to the latest statistics, over 1,000 companies have officially filed lawsuits attempting to overturn the current tariff policies and demand the refund of tariffs totaling hundreds of billions of dollars.

Among them are well-known listed giants like Costco and Goodyear Tire & Rubber Co. In just the first few days of 2026, dozens of entities have joined the fight.

The focus of this lawsuit is the final ruling by the U.S. Supreme Court on the legality of Trump’s comprehensive tariff plan.

According to CCTV News, the Supreme Court has set this Friday (Eastern Time) as the opinion release date. Although it has not yet been confirmed whether the case includes tariffs, the market generally expects the ruling to be announced as early as this week.

What happens if the court rules tariffs illegal?

Positive for US stocks: Wells Fargo’s chief equity strategist Ohsung Kwon estimates that if tariffs are overturned, the pre-tax profit of S&P 500 companies in 2026 could increase by about 2.4% compared to last year. Removing tariffs will directly improve corporate profitability, benefiting the stock market.

Negative for US bonds: On the flip side, canceling tariffs will weaken a significant source of government revenue, exacerbate concerns over the federal deficit, and potentially trigger a sell-off of US bonds.

Policy complexity: If tariff removal provides additional economic stimulus, the Fed’s rate-cutting path will become more complicated.

Even if the Supreme Court rules tariffs illegal, the specific refund process (involving about $133 billion) may still need to be handled by lower courts, and the White House might invoke other legal measures to reimpose restrictions, meaning policy uncertainty will persist long-term.

02 Countdown to Key Mineral Tariffs: Silver and Platinum Face “Thrilling Moments”

Apart from the comprehensive tariff case, the results of the U.S. “Section 232” investigation into key minerals are expected to be announced this Saturday (January 10). This decision directly affects the fate of Comex silver and platinum group metals.

Citigroup’s research team has provided detailed scenario analyses:

If tariffs are imposed: There will be an approximately 15-day implementation window, triggering a brief “rush to ship to the US.” This will push up benchmark prices and futures premiums (EFP) in the US.

As of January 7, EFP pricing indicates market expectations of about 12.5% tariff rate for platinum, around 7% for palladium, and about 5.5% for silver. These implied tax rates reflect market uncertainty amid high volatility.

(Expectations of tariff rates based on EFP pricing)

If no tariffs are imposed: Metals will flow out of the US to other parts of the world, easing pressure on London spot prices and possibly leading to price corrections.

How to interpret specific varieties?

Silver (most likely no risk): Since the US heavily relies on imported silver, Citi considers no tariffs as the baseline scenario, even if tariffs are imposed, exemptions for Canada and Mexico are possible. Under the “no tariff” scenario, silver prices may face temporary downward pressure.

Palladium (high risk): Most likely to be taxed (e.g., 50%). Once tariffs are imposed, domestic import costs in the US will rise sharply, pushing futures prices higher.

Platinum (coin flip): Whether tariffs are imposed is currently highly uncertain.

The investigation results were originally scheduled for submission by October 12, 2025, with President Trump having 90 days to act, meaning the deadline is around January 10( this Saturday). However, Citi believes that considering the numerous commodities involved, Trump’s action could be indefinitely delayed, and during this period, silver and platinum group metals prices are likely to continue rising.

03 Technical Sell-Off Incoming: Commodity Index Rebalancing “Bloody Week”

Beyond fundamental news, a “passive storm” in capital markets has already begun.

The highly anticipated Bloomberg Commodity Index (BCOM) annual rebalancing started after market close on January 8 and will continue until January 14. To maintain the diversification rule that no single commodity exceeds 15% weight, this adjustment has exerted significant selling pressure on the precious metals sector.

Gold: Weight reduced from 20.4% to 14.9%, facing sell orders equivalent to about 3% of total holdings.

Silver: Under especially intense pressure! Weight will be sharply cut from 9.6% to 3.94%, with estimated sell volume reaching up to 9% of total holdings.

This “non-fundamental” sell-off triggered by index rules forces speculative funds to exit and wait, intensifying short-term volatility.

It’s worth noting that the decline in gold, silver, and other precious metals follows a rare epic rally. Spot gold’s total gain for 2025 exceeded 70%, silver’s increase once reached about 150%, and after entering a frenzy mode from December 23 last year, both hit record highs consecutively. Such massive short-term profit-taking has made the market extremely vulnerable to liquidity shocks.

Although Goldman Sachs analysts believe that as long as London inventories remain tight, liquidity is the key to price determination, in the short term, facing such large-scale passive fund “rebalancing,” investors’ nerves must be kept on edge.