TLDR
- US stock futures surged Thursday after a federal trade court blocked Trump’s global tariffs, ruling the administration lacked authority under emergency powers
- Dow futures rose 553 points (1.1%), S&P 500 futures gained 1.6%, and Nasdaq 100 futures jumped 1.9%
- Nvidia beat revenue expectations but missed earnings estimates due to US chip sale restrictions to China
- The chipmaker expects to lose $8 billion in sales next quarter from the China ban
- Trump administration plans to appeal the tariff ruling in federal court
Stock markets opened Thursday with strong gains after a federal trade court delivered a blow to President Trump’s trade agenda. The US Court of International Trade ruled that the administration did not have legal authority to impose sweeping global tariffs under emergency powers.
🚨U.S. Trade Court just told Trump his tariffs are illegal – blocked all of them.
😂😂😂😂😂😂😂😂😂😂😂😂😂 pic.twitter.com/ZhJnFnQYOq
— Dean Blundell🇨🇦 (@ItsDeanBlundell) May 28, 2025
The court decision sent Dow Jones Industrial Average futures up 553 points or 1.1%. S&P 500 futures climbed 1.6% while Nasdaq 100 futures led gains with a 1.9% increase.
The three-judge panel blocked tariffs that Trump imposed using the International Emergency Economic Powers Act of 1977. The administration had argued that the ongoing US trade deficit created a national emergency that justified the levies.
Lawyers for the Trump administration immediately notified the court they would appeal the decision. The ruling can be challenged in federal court, leaving the final outcome uncertain.
Legal Challenge to Trade Policy
Congress typically holds responsibility for tariffs but has delegated many powers to the president over decades. Trump cited national emergency powers to bypass normal legislative processes for his trade measures.
If the ruling stands, the administration must find alternative legal justification for its tariff policy. Legal experts note that Congress has written laws giving presidents multiple pathways to impose trade restrictions.
The court decision provides temporary relief for businesses and investors who have faced uncertainty from Trump’s trade policies. Markets responded positively to the prospect of slowed tariff implementation.
Nvidia Reports Mixed Quarter
Technology stocks received additional support from Nvidia’s first-quarter earnings report released Wednesday evening. The AI chipmaker beat revenue expectations but fell short on adjusted earnings per share.
🚀 Nvidia $NVDA stock rallies after Q1 earnings beat
🟢 EPS of $0.81 beating expectations of $0.75
🟢 Revenue of $44.1B beating expectations of $43.25B
👉 AI demand ‘incredibly strong,’ but Q2 guidance misses estimates
📈 Nvidia shares were up 7.4% after the release pic.twitter.com/cMpCvlL0Kz
— Trader Edge (@Pro_Trader_Edge) May 29, 2025
Nvidia’s revenue performance exceeded Wall Street forecasts despite facing restrictions on chip sales to China. The company reported strong demand for its AI processors in other markets.
However, the US government’s ban on H20 chip sales to China created headwinds for the company. Nvidia warned investors it expects to miss $8 billion in sales during the next quarter due to these restrictions.
CEO Jensen Huang criticized US chip export controls during the earnings call. He argued the restrictions have spurred innovation among Chinese rivals and weakened America’s competitive position.
“China’s AI moves on with or without US chips,” Huang told investors. He questioned whether the world’s largest AI markets would continue running on American technology platforms.
Despite the China-related challenges, Nvidia shares jumped nearly 5% in after-hours trading. The positive reaction helped boost the broader technology sector in pre-market trading Thursday.
The 10-year Treasury yield stood at 4.531% early Thursday, up from the previous session. The DXY Dollar Index gained 0.2% against major trading partners.
Investors will monitor earnings from retailers Best Buy and Costco on Thursday. Weekly jobless claims data and revised first-quarter GDP figures are also scheduled for release.
The initial GDP reading showed the US economy contracted for the first time in three years during early 2025. The revision will provide updated details on economic performance during the quarter.
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