US equity markets posted modest gains on Thursday after a day of volatile swings driven by contradictory legal rulings on former President Donald Trump’s global tariffs. A ruling from the US Court of International Trade declaring the tariffs illegal briefly lifted sentiment, but this was quickly tempered after an appeals court reinstated them temporarily within 24 hours. Simultaneously, strong first-quarter results from Nvidia supported technology stocks and helped buoy the Nasdaq and S&P 500.
Highlights:
S&P 500 closed at 5,912.17, up 0.4%
Dow Jones ended at 42,215.73, up 0.3% (+117 points)
Nasdaq Composite finished at 19,175.87, up 0.4%
Markets swung as a lower court struck down Trump’s tariffs, but an appeals court reinstated them.
Nvidia earnings beat expectations with $44.06 billion in Q1 revenue.
Tariff Chaos: Legal Whiplash Adds to Market Volatility
Markets opened on a stronger note after a late-Wednesday ruling by the US Court of International Trade invalidated several of Trump’s broad-based global tariffs, arguing that the former president lacked authority to impose such sweeping trade measures. The court provided the administration 10 days to comply with its decision, raising hopes among investors that a rollback of duties could improve business costs and global trade dynamics. However, these hopes were quickly dashed when an appeals court reinstated the tariffs temporarily, triggering a wave of uncertainty.
White House spokesperson Kush Desai issued a sharp response, defending the administration’s stance: “It is not for unelected judges to decide how to properly address a national emergency… the Administration is committed to using every lever of executive power to restore American Greatness.”
Highlights:
Court of International Trade rules Trump-era tariffs illegal.
Appeals court reinstates tariffs within 24 hours of the initial ruling.
Market reacts to legal back-and-forth with heightened volatility.
Investors worry tariffs could prolong inflation and restrict Fed policy.
Investor Anxiety Over Tariffs Persists Despite Sentiment Bounce
While the prospect of lower tariffs initially cheered investors, analysts remained cautious about lasting implications. The temporary reinstatement has revived concerns about inflationary pressures, supply chain disruptions, and the Federal Reserve’s capacity to ease rates in a politically volatile trade environment. Economist sentiment suggested the potential for significant policy hesitation in the coming months, especially with ongoing budget deficit debates and legal complexities over tariff enforcement.
Ahmad Assiri of Pepperstone observed, “The uncertainty premium remains very much alive. Every forthcoming court milestone carries the potential for fresh headlines.”
David Morrison of Trade Nation echoed the sentiment, stating, “Markets are extremely skittish at present and capable of big moves in both directions… This is not the slow and steady bull market that took off in October 2022.”
Highlights:
Analysts warn of persistent legal and policy uncertainty.
Tariffs may constrain future Fed rate cuts.
Budget deficit concerns add to downside risks.
Market mood fragile amid policy reversals.
Nvidia Earnings Power Tech Rally Amid Trade Turmoil
Offsetting the tariff headwinds was chipmaker Nvidia, which reported a blockbuster Q1 performance after Wednesday’s closing bell. The company posted $44.06 billion in revenue, well above Wall Street estimates, and addressed investor concerns over Chinese trade restrictions with assurances about continued demand and strategic diversification. Nvidia shares surged as much as 6% intraday, ultimately closing around 3% higher at $139. Other semiconductor stocks followed suit, with AMD up 0.15% and TSMC gaining 0.5%.
Tech stocks broadly benefited from the positive spillover, lifting the Nasdaq and helping cap downside pressure on broader indexes.
Highlights:
Nvidia reports $44.06 billion in Q1 revenue, beating estimates.
Shares rise up to 6%, settle 3% higher.
CEO Huang addresses concerns about China restrictions.
Chip stocks AMD and TSMC also post modest gains.
Market Outlook: Volatility Expected to Persist Amid Legal Uncertainty and Fed Hesitation
Investors face a complicated backdrop heading into June, with the potential for more tariff rulings, ongoing trade negotiations, and uncertainty over Federal Reserve policy. Trump’s “TACO trade” initiative—named for the Temporary Adjusted Custom Orders—has so far reduced most tariffs to 10% for 90 days, while China tariffs stand at 30%, and EU tariffs are deferred until July 9. These staggered timelines ensure that tariff headlines will continue to sway markets in the weeks ahead.
Highlights:
TACO trade reduces Trump’s April 2 tariffs to 10% for 90 days.
Tariffs on China cut to 30%, EU tariffs delayed until July 9.
Markets braced for headline-driven swings as policy unfolds.
Fed unlikely to cut rates quickly with trade uncertainty lingering.
