A Federal appeals court’s decision to temporarily block a prior ruling that invalidated most of the Trump administration’s broad tariffs reignited uncertainty in U.S. markets. This development led to renewed selloffs on Wall Street and a sharp decline in the U.S. dollar from earlier intraday highs, shaking investor confidence as legal battles over trade policy continue to unfold.
Highlights:
Appeals court grants White House more time to defend tariffs imposed under IEEPA.
Trump administration signals tariffs could be reinstated under alternative laws, but this may take months.
Market volatility increases with renewed risk-off sentiment across U.S., European, and Asian equities.
Legal Battle Extends Trump Tariff Agenda
The appeals court ruling reversed a decision by the U.S. Court of International Trade that found the president lacked authority under the International Emergency Economic Powers Act (IEEPA) to impose sweeping reciprocal tariffs announced in early April. Despite this setback, White House officials remain committed to maintaining tariffs, suggesting they could pursue other legal pathways under the Trade Act, though these routes may require months to execute.
Peter Navarro, former top trade adviser to Trump, reaffirmed the administration’s stance, emphasizing that the tariff strategy remains active to “protect American jobs and factories.” White House Press Secretary Karoline Leavitt criticized the judicial interference and called for the Supreme Court to resolve the dispute to safeguard constitutional powers.
Highlights:
Trump’s tariff agenda described as “alive and well” despite court challenges.
White House vows to pursue alternative legal means to uphold tariffs.
Calls for Supreme Court intervention to settle authority questions.
Market Reaction: Early Gains Erode Amid Legal Uncertainty
Wall Street initially rallied on the trade court’s original ruling alongside strong quarterly earnings from Nvidia, which boosted the tech sector. However, the rebound proved short-lived as the appeals court decision prompted a retracement of gains. By Friday’s Asian trading session, U.S. stock futures were trading lower, signaling ongoing risk aversion.
Dow Jones futures fell 0.08%.
S&P 500 and Nasdaq 100 futures each declined 0.26%.
European futures pointed to lower opens, with Euro Stoxx 50 down 0.19% and Germany’s DAX down 0.15%.
Asian markets mostly traded lower, led by Hong Kong (-1.4%), Japan (-1.39%), and South Korea (-0.61%).
Australia’s ASX 200 remained flat early Friday.
Investor focus remains on U.S.-EU trade talks, with the tariff legal battles adding complexity to already fragile market sentiment.
Highlights:
Stock market volatility returns amid trade policy uncertainty.
Global equity markets broadly weaker with Asia and Europe pressured.
Investor caution ahead of key trade negotiation updates.
U.S. Dollar Drops, Haven Assets Rally on Renewed Risk Aversion
The court’s decision undermined confidence in the U.S. dollar, pushing it sharply lower from intraday highs. Treasury yields initially jumped to 4.5% but retreated to 4.42% as bond prices stabilized amid the market turbulence.
Safe-haven assets saw significant inflows amid growing unease:
Gold futures surged to $3,321 per ounce, up from $3,269.
Euro rebounded strongly, climbing from 1.1210 to 1.1353 against the dollar.
Swiss franc and Japanese yen also strengthened notably versus the dollar.
These moves underscore a flight to quality amid unresolved trade tensions and volatile market conditions.
Highlights:
Dollar weakened amid escalating trade policy risks.
Treasury yields retreated after initial spike.
Gold and safe-haven currencies gained amid risk-off sentiment.
Wall Street Slides as Appeals Court Reinstates Trump Tariffs, Dollar Weakens
A US federal appeals court temporarily blocked a previous ruling that barred most of Trump’s tariffs, allowing the administration more time to defend and potentially reimpose broad import levies. This reignited uncertainty in global trade policies, triggering renewed selling pressure on US stocks and a sharp fall in the US dollar. Equity markets in the US, Europe, and Asia faced downside pressure amid growing trade tensions and legal uncertainty. Safe-haven assets like gold and defensive currencies (euro, yen, Swiss franc) saw gains as risk sentiment soured. Treasury yields initially rose but then eased as investors sought safer assets.
Impact on Indian Stock Market:
Increased Volatility: Uncertainty around US tariffs and trade policy will likely lead to heightened volatility in Indian equity markets, especially in export-driven and import-reliant sectors.
Pressure on Exporters: Indian exporters could face headwinds if tariffs disrupt US demand or trigger retaliatory measures.
Rupee Vulnerability: Weakening US dollar and trade concerns may pressure the rupee, impacting foreign portfolio inflows and corporate import costs.
Safe-Haven Flows: Rising gold prices and demand for safe assets could attract investor interest in gold ETFs and sovereign bonds.
Focus Points for Investors:
Monitor developments in US trade policy and legal challenges for potential market-moving updates.
Review sectoral exposure, especially IT, pharma, and textiles, which are sensitive to US trade dynamics.
Hedge currency risk amid rupee fluctuations linked to global trade uncertainty.
Consider safe-haven assets like gold as a portfolio diversifier during increased market volatility.
Watch global bond yields and inflation expectations that can impact Indian interest rates and borrowing costs.
