Wall Street climbs after US court shoots down Trump's sweeping trade tariffs
29 May 2025, 15:00 | Updated: 29 May 2025, 15:01
Wall Street and financial markets around the world jumped after a US court ruled that President Donald Trump is not authorised to impose sweeping tariffs on imports under an emergency powers law.
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Futures for the S&P 500 rose 1% before the opening bell and futures for the Dow Jones Industrial Average were up 0.4%. Futures for the Nasdaq, home to Nvidia, other chipmakers and the biggest American technology companies, climbed 1.5%.
US Court of International Trade in New York found that the 1977 International Emergency Economic Powers Act, which Mr Trump has cited as his basis for ordering massive increases in import duties, does not authorise the use of tariffs.
The White House immediately appealed and it was unclear if Mr Trump would abide by the ruling in the interim. The long-term outcome of legal disputes over tariffs remains uncertain. But investors appeared to take heart after the months of turmoil brought on by Mr Trump's trade war.
Nvidia shares jumped 6% in off-hours trading after the chipmaker and artificial intelligence bellwether delivered another quarter of robust growth despite tariff-driven turbulence.
Heading into its earnings announcement on Wednesday, Nvidia's share price was right where it was at the beginning of 2025, before Mr Trump took office and started his tariff rollouts.
Nvidia's earnings, along with the court's tariff ruling, helped to propel other chipmakers and technology companies higher. Broadcom and Advanced Micro Devices each rose 3.1%, while Super Micro Computer jumped 4%. Apple and Amazon both rose about 2.5%.
A three-judge panel ruled on several lawsuits arguing Mr Trump exceeded his authority, casting doubt on trade policies that have jolted global financial markets, frustrated trade partners and raised uncertainty over the outlook for inflation and the global economy.
Many of Mr Trump's double-digit tariff hikes - including the huge levies on China - were already paused for up to 90 days to allow time for trade negotiations. But the uncertainty they cast over global commerce has stymied businesses and left consumers wary about what lies ahead.
"Just when traders thought they'd seen every twist in the tariff saga, the gavel dropped like a lightning bolt over the Pacific," Stephen Innes of SPI Asset Management said.
The ruling was, at the least, "a brief respite before the next thunderclap," he said.
In Europe at midday, Germany's DAX gained 0.4% and the CAC 40 in Paris jumped 0.8%. Britain's FTSE was unchanged.
Japan's Nikkei 225 index jumped 1.9% to 38,432.98. American's largest ally in Asia has been appealing to Mr Trump to cancel the tariffs he has ordered on imports from Japan and to also stop 25% tariffs on steel, aluminum and autos.
The ruling also initially pushed the dollar sharply higher against the Japanese yen, but it settled back down overnight. It was trading at 144.98 yen early on Thursday, up from 144.87 yen late on Wednesday.
Elsewhere in Asia, Hong Kong's Hang Seng added 1.3% to 23,561.86, while the Shanghai Composite index gained 0.7% to 3,363.45.
Australia's S&P/ASX 200 gained 0.2% to 8,409.80.
In South Korea, which like Japan relies heavily on exports to the US, the Kospi surged 1.9% to 2,720.64. Shares were also helped by the Bank of Korea's decision to cut its key interest rate to 2.5% from 2.75%, to ease pressure on the economy.
Read More: Trump puts EU trade war on ice as he delays 50% tariffs until July
Taiwan's Taiex edged 0.1% lower, and India's Sensex lost 0.2%.
The yield on the 10-year Treasury rose to 4.52% early on Thursday from 4.47% late on Wednesday.
US benchmark crude oil gained 32 cents to 62.16 dollars per barrel. Brent crude, the international standard, added 26 cents to 64.58 dollars per barrel.
The euro slipped to 1.1280 dollars from 1.1292 dollars.