The Supreme Court struck down most of Trump's sweeping tariff policy under the International Emergency Economic Powers Act, with the majority ruling that that law "does not authorize the President to impose tariffs." In response, Trump announced he will impose a new 10% "global tariff."

"Now I'm going to go in a different direction, probably the direction that I should have gone the first time," the president said during a press briefing at the White House after the high court's decision. "I'll go the way I could have gone originally, which is even stronger than our original choice."

Shares of "Magnificent Seven" member Amazon — a company that sources up to 70% of its goods from China, per Wedbush Securities, and that has already begun to see tariffs impact the price of certain items — jumped more than 2% following the ruling. Others believed to benefit from the outcome were higher as well, such as Home Depot and Five Below.

"In the case of Amazon specifically, a lot of their stuff is imported from China, so tariffs are going to make the prices on Amazon go up for customers, and when prices go up, people buy fewer of those things," said Jed Ellerbroek, portfolio manager at Argent Capital Management. "No longer facing that problem is the source of excitement, I think."

While the Supreme Court's rebuke was largely expected by Wall Street, some questions remain, however, including whether tariffs that have been paid under the steeper rates will need to be given back. The Supreme Court ruling was silent on the matter.

"Now lower courts are going to have to figure out what's going to happen to people who paid the tariffs and the government paying out big refunds," said FBB Capital Partners senior research analyst and asset allocation strategist Michael Brenner. "If that's out there, that would be effectively a form of economic stimulus."

Earlier in the day, traders received a downbeat view on growth of the U.S. economy, as gross domestic product increased 1.4% for the fourth quarter. That was far below the 2.5% gain that economists polled by Dow Jones had anticipated. The 4.4% advance in the third quarter sharply surpassed estimates.

The record-breaking government shutdown is largely to blame, according to the Commerce Department. That stoppage, which took place through the first half of the fourth quarter, took off around 1 percentage point from economic growth, the department estimated.

In addition to the GDP data, the personal consumption expenditures price index report — the Federal Reserve's preferred inflation gauge — showed that inflation held steady in December. Excluding volatile food and energy prices, core PCE came in at 3%, in line with expectations but still well above the Fed's 2% target.

With Friday's move, the Dow rose 0.3% on the week. The S&P 500 gained 1.1%, and the tech-heavy Nasdaq snapped a five-week losing streak, climbing 1.5%.

— CNBC's Jeff Cox contributed reporting.