US stock futures jump, dollar gains on tariff ruling

Synopsis

American stock futures saw a rise. The dollar's value increased after a US court blocked Donald Trump's global tariffs. The court considered the tariffs illegal. Nvidia Corp's strong earnings also boosted market confidence. Contracts for the S&P 500 and Nasdaq 100 experienced gains. However, the Trump administration can appeal the ruling in federal court. Oil prices also saw a jump.

US stock futures jumped and the dollar strengthened after President Donald Trump’s global tariffs were deemed illegal and blocked by the US trade court. Upbeat earnings from Nvidia Corp. also boosted investor sentiment.

Contracts for the S&P 500 and Nasdaq 100 gained 1.4% and 1.7% respectively. The ruling can now be appealed by the Trump administration in federal court. The yen declined 0.7% and oil jumped. Shares in Nvidia rose over 5% in post-market trading in New York after the company delivered a solid revenue forecast. Equities in Japan and South Korea advanced at the open.

Global financial markets were hit by a sweeping selloff after Trump’s bid to remake the world trading order proved more aggressive than expected. Trump’s tariff blitz, announced April 2, spooked investors who caught on to a ‘Sell America’ trade as they remain wary on how the levies will impact growth. Trump’s pause on the tariffs and negotiations with countries have since helped stabilize the markets, putting the MSCI All Countries World Index within striking distance of a record high.

“More details are needed,” Rodrigo Catril, a strategist at National Australia Bank Ltd. in Sydney said in reference to the ruling. “Particularly whether there is an injunction or whether this goes to an appeal process and tariffs remain in place for now. The best guess at this stage is that the administration has enough powers to bypass the ruling and implement tariffs on several grounds.”

Meanwhile, Nvidia Chief Executive Officer Jensen Huang soothed investor fears about a China slowdown by delivering a solid sales forecast, saying that the AI computing market is still poised for “exponential growth.”

While Nvidia boosted optimism, HP Inc. dropped about 15% in extended trading after the company’s profit outlook fell short of estimates and it cut the annual earnings forecast, pointing toward a weaker economy and continuing costs from US tariffs on goods from China.

News reports that the Trump administration is moving to restrict the sale of chip design software to China spurred a plunge in Cadence Design Systems Inc. and Synopsys Inc. Meantime, Tesla Inc. was said to begin its robotaxi service in Austin on June 12.

Trump bristled at suggestions that Wall Street believes he’s ultimately unwilling to follow through on extreme tariff threats, saying his repeated retreats are instead part of a strategy to exert trade concessions.

“It’s called negotiation,” Trump said on Wednesday, adding that he intentionally would “set a number at a ridiculous high number” and then “go down a little bit” as part of talks.

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