Trump's Tariffs Throw Wrench in Global Stock Party – But Nvidia's Still Dancing!

Global Stock Rally Loses Steam Amid Tariff Uncertainty, Nvidia Shines

A global stock market rally that began with vigor in Asia on Thursday encountered headwinds as it moved through Europe and into the United States, primarily due to lingering uncertainty surrounding President Trump’s tariffs. Despite an initial surge of optimism following a U.S. court ruling that blocked many of these tariffs, the momentum waned as the day progressed.

In late trading, the S&P 500 was up 0.2%, after having relinquished most of its earlier gains. The Dow Jones Industrial Average climbed 45 points, or 0.1%, while the Nasdaq composite saw a 0.2% increase. This tepid performance followed significant jumps in Tokyo and Seoul, where markets initially reacted positively to the U.S. Court of International Trade's decision.

Key Highlights:

• Court Ruling: The U.S. Court of International Trade ruled that the 1977 International Emergency Economic Powers Act did not authorize the tariffs imposed by President Trump.
• Market Reaction: Initial market euphoria was tempered by the White House's notice of appeal and the realization that the ruling did not affect all of Trump's tariffs.
• Analyst Perspective: Ulrike Hoffmann-Burchardi of UBS Global Wealth Management noted that Trump could still impose tariffs through other means.

Brian Jacobsen, chief economist at Annex Wealth Management, viewed the court's move as a positive development, stating, "The bar is raised for President Trump to resurrect his tariffs." He suggested that markets were pricing in a more favorable type of uncertainty compared to the period since Trump's initial tariff announcement.

The S&P 500 is now within 4% of its all-time high, a significant recovery from a nearly 20% drop last month.

Nvidia's Stellar Performance

On Wall Street, technology stocks led the charge, buoyed by Nvidia's impressive earnings report. The chip company exceeded analysts' expectations for both profit and revenue, driving its stock up by 3.2% and significantly lifting the S&P 500.

Other notable movers included:

• C3ai: The AI application software company surged 24.4% after reporting stronger-than-expected profits and an increased contract value with the U.S. Air Force.
• E.l.f. Beauty: The cosmetics company rose 24% following a strong earnings report and its acquisition of Hailey Bieber's Rhode skincare brand for $1 billion.

However, not all companies experienced gains. Best Buy, despite reporting better-than-expected profits, fell by 7.7% due to disappointing revenue and a lowered financial outlook, citing tariff-related uncertainties.

Broader Economic Indicators

Treasury yields eased following mixed economic reports. The 10-year Treasury yield fell to 4.42%, while the two-year Treasury yield slipped to 3.94%.

Global Market Overview

Asian markets generally performed well, with Japan's Nikkei 225 jumping 1.9% and South Korea's Kospi rallying 1.9% after the Bank of Korea cut its key interest rate. European markets, however, experienced more muted movements, with France's CAC 40 and Germany's DAX swinging from early gains to modest losses.

The Road Ahead

While the initial enthusiasm surrounding the U.S. court ruling has faded somewhat, the underlying sentiment remains cautiously optimistic. The market's ability to navigate ongoing uncertainties, particularly concerning trade policies, will be crucial in determining its future trajectory. Nvidia's strong performance underscores the continued importance of technology, particularly artificial intelligence, in driving market growth. As investors digest the latest economic data and policy developments, a measured approach will be key to navigating the complexities of the global financial landscape.

Source: https://apnews.com/article/stocks-markets-bonds-tariffs-trump-e9b612f1c8f4f338f24f609373075095