As of 11:45 a.m. Eastern Time, the Dow Jones was down 56 points, or 0.1%, showing caution among investors. Meanwhile, the S&P 500 edged up 0.3%, having pulled back from stronger gains earlier. The Nasdaq Composite climbed 0.6%, reflecting investor optimism in the tech sector following Nvidia’s earnings beat.
Major Index Performance
- S&P 500: Closed at 5,888.55, up 0.4%
- Dow Jones Industrial Average: Closed at 41,986.18, down 0.27%
- Nasdaq Composite: Closed at 19,100.94, up 0.5%
What led to the early rally in global markets?
Stocks had initially seen a strong rally beginning in Asia, where Tokyo and Seoul markets jumped nearly 2% in early trading. This came as the first global reaction to a ruling late Wednesday from the U.S. Court of International Trade. The court decided that Trump’s tariffs, which were imposed using the 1977 International Emergency Economic Powers Act, exceeded the legal bounds of that law.
According to the court, the act does not give the president unlimited authority to impose tariffs on imports, which Trump used to justify sweeping duties on a range of foreign goods during his presidency. This legal development injected fresh uncertainty into the market, especially around future US trade policy.
Key Market Drivers
- Tariff Ruling: The U.S. Court of International Trade ruled that President Trump’s extensive tariffs overstepped his authority, easing investor concerns about potential economic repercussions.
- Nvidia Earnings: Nvidia reported a record first-quarter revenue of $44.06 billion, a 69% increase year-over-year, surpassing expectations. Despite export restrictions to China impacting profits, the strong revenue boosted investor confidence.
Why is the Dow Jones falling despite positive tech momentum?
The Dow Jones Industrial Average, composed of legacy industrial and blue-chip companies, has lagged behind tech-heavy indices. Even as Nvidia and other tech stocks pulled the Nasdaq up, concerns over the broader economy and trade policy held back the Dow. The 165-point drop earlier in the day, narrowing to a 56-point decline, shows how cautious the broader market has become. Investors are weighing the legal uncertainty from the trade court ruling and potential ripple effects on American manufacturing and exports.
ETF Performance
- SPDR S&P 500 ETF Trust (SPY): Closed at $588.86, up 0.19%
- SPDR Dow Jones Industrial Average ETF (DIA): Closed at $420.58, down 0.20%
- Invesco QQQ Trust (QQQ): Closed at $520.21, up 0.25%
How did Nvidia’s results boost the Nasdaq?
A big part of the Nasdaq’s strength came from Nvidia (NVDA), which reported blockbuster earnings that beat Wall Street estimates. The company, a key player in AI chips and data centers, reported strong sales, reinforcing investor confidence in the continued growth of the tech sector.
Nvidia’s performance not only lifted its own stock, but gave a general boost to semiconductor and AI-related companies, helping the Nasdaq climb even as other indices slowed down.
Sector Highlights
- Technology: Led by Nvidia’s performance, tech stocks saw significant gains.
- Retail: Mixed results, with companies like Best Buy and HP among the top losers on the S&P 500.
What does the court ruling mean for US trade policy?
The court’s decision could reshape how the US imposes tariffs in the future. By stating that the International Emergency Economic Powers Act doesn’t authorize such sweeping tariffs, it calls into question many of the trade actions taken under Trump’s administration.
This legal twist could limit future presidents from using emergency powers to alter trade rules without congressional approval, leading to a more stable but slower-moving trade policy. However, it also brings short-term uncertainty, especially for companies heavily reliant on imported goods or materials.
Where are markets heading next amid trade uncertainty?
While the S&P 500 and Nasdaq are holding on to modest gains, today’s mixed movement shows a market trying to find direction. Investors are caught between strong corporate results—particularly in tech—and political uncertainty related to trade.
If further legal challenges follow or if Congress intervenes on trade authority, the markets could see more volatility in the coming weeks. At the same time, continued strength in tech could help balance out weaknesses in industrial and manufacturing sectors.
FAQs:
Q1: Why did the Dow Jones fall today in the US stock market?
The Dow fell due to trade uncertainty and weaker industrial stocks.
Q2: How did Nvidia affect the Nasdaq’s rise in the US stock market?
Nvidia’s strong earnings helped push tech stocks and the Nasdaq higher.
