Kalshi and Polymarket Traders Predict Supreme Court of the United States Likely to Limit President Donald Trump’s Tariff Powers, Odds Plunge to 25–30 %

In a stark shift in sentiment among prediction-market participants, traders on both Kalshi and Polymarket are betting that the Supreme Court will curb President Donald Trump’s sweeping tariff authority. Odds that the Court will side with Trump have dropped to roughly 29 % on Kalshi and 25 % on Polymarket, down significantly in the past 24 hours.

Forecast Markets React to Legal Signals

The markets’ sharp correction in probabilities follows yesterday’s oral arguments at the Supreme Court, where several conservative justices questioned the administration’s reliance on the International Emergency Economic Powers Act (IEEPA) to impose broad tariffs.

 The justices complained that tariffs essentially function as taxes a power reserved to Congress and raised concerns about executive overreach. On Wall Street and in prediction markets, this translated into a rapid re-pricing of expectations.

On Kalshi, which is U.S.-regulated, traders had assigned around 45 % to 47 % chance earlier this week that the court would uphold Trump’s tariff powers. But by late Wednesday the number slipped to about 30 %, representing a drop of nearly 20 percentage points. On Polymarket, a crypto-settled platform, the odds sank to approximately 25 %, showing near-alignment across platform types. 

Why This Matters for Trade and Markets

If the Supreme Court rules against the administration’s broad use of IEEPA to impose tariffs, the consequences could be far-reaching:

• It may limit future presidential unilateral trade actions, particularly those based on national-emergency statutes.
  
  

• It could force the administration to rely more heavily on Congress for approving large-scale trade measures, introducing greater legislative uncertainty.
  
  

• Markets may see a potential easing of tariff pressure, which in turn might lift stocks sensitive to global supply chains and import costs. Analysts already view a ruling against Trump as a potential market tailwind. 
  
  

• Prediction marketplaces themselves highlight how participants are using such platforms as early indicators of policy and legal shifts, offering near-real-time views into evolving risk perceptions. 

What’s Driving the Sudden Shift

Several interlocking factors contribute to this decline in expectations:

• Judicial skepticism appears more pronounced than anticipated. Chief Justice John Roberts and others pressed the administration’s attorney on whether the IEEPA was meant to grant sweeping tariff powers. 
  
  

• Major questions doctrine concerns were also raised: the idea that actions of vast economic significance require clear congressional authorisation.
  
  

• Prediction market sensitivity: Traders reacted swiftly to the hearing transcripts and public feedback, adjusting odds ahead of public news announcements. Their volume on these contracts surpassed $1.3 million.
  
  

• Regulatory and trade uncertainties: Because Trump’s tariff regime has already applied broadly, a strike-down could create ripple effects across industries prompting traders to hedge earlier via these markets.

What to Watch Next

• The final Supreme Court decision: A ruling is expected in the coming weeks and will determine how far the president can claim emergency-power authority for imposing tariffs.
  
  

• Market and sector responses: Supply-chain dependent industries, import-heavy firms, and global trade-exposed equities could react strongly to the outcome.
  
  

• Future prediction-market shifts: Watching how contracts on Kalshi and Polymarket adjust in the lead-up to the ruling offers insight into trader sentiment and risk expectation.
  
  

• Policy reaction: If the Court limits tariff authority, the administration may turn to Congress for statutory revisions or new trade instruments another signal for markets.

Frequently Asked Questions (FAQs)

Q1: What exactly are prediction markets like Kalshi and Polymarket measuring in this case?
They treat the question “Will the Supreme Court uphold Trump’s tariff powers?” as a binary event. The market price implies the collective probability traders assign to a “Yes” outcome.

Q2: Why have the odds dropped so fast?
The rapid decline followed oral-arguments during which justices strongly questioned the administration’s legal basis under the emergency-powers statute, signalling a lower likelihood of a favourable ruling.

Q3: Does a low market odds mean the outcome is certain?
No. While the markets price in current sentiment and information, the final outcome can differ. Prediction markets are useful indicators but not guarantees.

Q4: How could this affect the markets if the court rules against the administration?
If the Court limits tariff powers, it may remove a source of uncertainty for companies exposed to global import costs, potentially boosting equities and reducing inflation risk from tariffs.

Q5: Are these prediction markets open to normal investors?
Platforms like Kalshi are U.S-regulated and allow qualified traders to participate; Polymarket is crypto-based and operates under different jurisdictional conditions. Participation may vary by region.

Q6: What other outcomes are possible besides a simple “Yes” or “No” ruling?
The Court might issue a more nuanced ruling for example, limiting the scope of the emergency-power statute rather than completely striking it down, which could also influence trader expectations and market responses.