What Happened With Trump’s Tariffs and Why Does It Matter for the Stock Market?
On Wednesday night, the US Court of International Trade ruled against some of the tariffs imposed by the Trump administration under emergency powers. The court declared these tariffs illegal, dealing a setback to Trump’s trade agenda. This decision targets tariffs announced earlier this year, halting 6.7 percentage points of duties. However, the ruling can be appealed in federal court, so this might not be the final word.
This court decision is a key reason US futures climbed. Investors see it as a possible easing of trade tensions, which have weighed heavily on markets. Yet, analysts at Goldman Sachs warn that this ruling is only a temporary hurdle for the administration. According to their economists, the White House could still impose tariffs using other tools, like Section 232 levies on steel, aluminum, and autos. Those alone could add about 7.6 percentage points of tariffs, offsetting the blocked duties.
How Did Nvidia’s Earnings Affect Wall Street Sentiment?
Nvidia’s latest earnings report caught Wall Street’s attention on Wednesday. The company beat revenue expectations but missed on adjusted earnings per share due to the impact of US export restrictions. Nvidia warned it expects to lose about $8 billion in sales next quarter because of the ban on selling its advanced H20 chips to China.
Despite these setbacks, Nvidia’s shares surged in after-hours trading. CEO Jensen Huang criticized the US government’s chip curbs during the earnings call, saying these restrictions have pushed Chinese rivals to innovate faster, which hurts America’s global AI leadership. “China’s AI moves on with or without US chips,” Huang said. “The question is whether one of the world’s largest AI markets will run on American platforms.”
Nvidia’s earnings have reignited hopes that big tech companies can survive the pressures from trade conflicts and regulatory hurdles.
What Are Investors Watching Next in the Market?
Looking ahead, investors will be focused on earnings from major retailers like Best Buy and Costco. Retailers have been caught in the crossfire of the trade war, facing rising costs from tariffs. President Trump recently told Walmart to “eat” the higher prices resulting from new duties, showing the tensions remain high in the retail sector. In addition to corporate earnings, Thursday’s market will also react to fresh economic data. Weekly jobless claims and a revised report on the US GDP growth for the first quarter of 2025 are due. The initial GDP report showed a contraction, the first in three years, which adds another layer of uncertainty for markets.
Can the Trump Administration Find Other Ways to Enforce Tariffs?
Despite the court’s ruling blocking some tariffs, experts say the Trump administration has other options to maintain its trade policies. According to Goldman Sachs chief US political economist Alec Phillips, this setback “increases uncertainty but might not change the final outcome for most major US trading partners.”
One alternative is using Section 232 tariffs, which target imports like steel, aluminum, and autos on national security grounds. If fully applied, these tariffs could add as much as 7.6 percentage points to current duties, balancing out the tariffs that were blocked. This means the trade war could continue in a different form, keeping investors cautious.
Why Are Tech Stocks Leading the Market Rally Today?
Tech stocks, especially those like Nvidia, are leading the market gains today. The Nasdaq futures jumped 1.8%, outpacing the Dow and S&P futures. This strong tech performance reflects Wall Street’s belief that companies in this sector are resilient despite challenges from trade policies and export bans.
Nvidia’s earnings gave a boost to tech investor confidence, showing that even with government restrictions, demand for AI chips and technology remains strong. The company’s message highlights the ongoing competition between the US and China in AI technology, a key theme for the stock market.
FAQs:
What impact did the court blocking Trump tariffs have on stock market today?
The court ruling stopped some tariffs, lifting stock futures and easing trade war worries.
How did Nvidia’s earnings affect stock market today despite China export restrictions?
Nvidia beat revenue expectations, boosting tech stocks even with sales losses from China bans.
